Monday, April 01, 2019 / by Dixie Simon
Selling your home and finding a new place to live can be exciting—especially if you anticipate making some money in the process. As anyone who has received a paycheck knows, earning income and paying taxes go hand-in-hand. If you stand to profit from selling your home, you may be subject to the capital gains tax. So if you’re wondering, “What is the capital gains tax?” then you’ve come to the right place. Here are some of the factors that affect capital gains tax.
How Long Have You Lived There?
There are two rates for the capital gains tax:
The short-term capital gains rate and the long-term. If you’ve owned your home for one year or less when it sells, those earnings may be subject to the short-term capital gains tax. The short-term tax corresponds to your regular income tax bracket.
The long-term capital gains rate applies if you’ve owned yo ...