Submitted By: Joe
Answered: June 18, 2013 8:30 am

What will the capital gains rate be on the sale of my home in 2013?

It depends. If you qualify for the home sale exclusion, then gain up to $250,000 ($500,000 on a joint return) is tax free; there is no capital gain. If your gain excludes your applicable exclusion amount, or if you don’t qualify for the exclusion, gain can be taxed at zero (if you are in the 10% or 15% tax bracket after including the home sale gain), 15% if you are in a tax bracket over 15% but not over 35%, and 20% if you are in the 39.6% tax bracket. What’s more, if you are a “high-income taxpayer,” gain over the exclusion amount is treated as investment income and subject to the 3.8% additional Medicare tax on net investment income.

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Tax Glossary

Hobby loss

Hobby expenses are deductible only up to income from the activity; loss deductions are not allowed.

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