What is the tax free capitol gains limit when selling a home

Question

What is the tax free capitol gains limit when selling a home

Answer 1

If it's a principal residence - it's completely tax free. If you have rented it out at some point, the prorated portion of time it was deemed to be a principal residence x capital gain is tax free.

In addition, if you are subject to any capital gains, only 1/2 is taxable.

The rules on whether a residence is considered principal or not can get complicated, in which case you may want to check out the revenue canada web page @ http://www.cra-arc.gc.ca/menu-e.html

However, usually, as long as you only owned one residence and you lived in it, it is considered principal, which is most cases.

Please note, this information is only relevant if you are a CANADIAN RESIDENT and the principal residence is situated in CANADA.

***I realize it's the US forum for tax now... but seeing my answer, wouldn't you guys like to move up here?!***

Answer 2

If it is your primary residence and you lived in it and owned it for 2 of the 5 years before you sell, the first $250,000 if single ($500,000 if married) of profit is tax free.  If you did not live in it and own it for 2 of the last 5 years, all of the profit is taxed.  There are exceptions to this rule for sales due to job transfer, medical, divorce.

Answer 3

Like others have said, it is $250,000 single, $500,000 married. You have to have owned it for at least two years, lived in it two of the last five years AND not have not used the exclusion in the last two years.  There are exceptions however if you fail the ownership test, and you have a change of employment, health issues, or other unforseen circumstances as defined by the IRS, where you can pro-rate the maximum amount.  Also if you used your home for business purposed and there was depreciation allowed or allowable, then you would need to recapture that depreciation on the sale, basically pay tax on that amount that was depreciated.  

Answer 4

$250,000 single, $500,000 married, assuming it's your principal residence.

Answer 5

$250K if you are single or $500K for a married couple.  That is only for your primary residence and you must have owned it AND lived in for 2 of the previous 5 years.  If you have ever rented it or used it for office-in-home deductions, you will have to pay tax on any recaptured depreciation that you took.