Mission Your Money: The Truth and Consequences of Capital Gains
For most military families, moving around is inevitable and that could mean selling your home sooner rather than later. So, it pays to understand how capital gains are taxed. Let me show you how it works.
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When you sell your home and make a profit, you can generally avoid paying capital gains taxes on up to $250,000 of that profit or double that $500,000 for those married and filing jointly.
To qualify for the full exemption, you must have owned the home for at least two years and lived in that home for at least two of the last five years.
There’s also some military considerations. If you did not live in the home because you were on qualified extended duty with the military, you can suspend that period of time in the captal gains calculations. But a suspension period cannot be more than ten years.
As with all things tax-related, it’s a good idea to consult your tax adviser. Especially for complex, but worth while exemptions.