Capital Gains on Investment Property

[James Jones]

Hello,

New to this forum. 

Quick question:

Quick question -

How much total capital gains tax (both fed and state) would be for a property that I bought in 1997 for $500,000 and sold today for 1,000,000?

The property is in California. 

[Allen Fletcher]

@James Jones

In order to get an answer, you need to share some information.

1) Was this home your primary residence?

2) Have you lived in the home 2 out of the last 5 years?

Note - If you answered yes to both of these questions you can receive a federal tax exemption for up to $500,000. This value is higher if you are married.

3) What is your income level?

Note - This determines your Federal capital gains rate.

4) What are your plans with the proceeds after the sale?

Note - If you are looking to invest the proceeds you could look into a 1031 exchange will defer all Federal taxes to a later date and allow you to purchase another property with the proceeds.

The best thing to do in your situation is to do a little research and talk to an accountant. The cost and time you spend doing this will be well worth the money you save on taxes.

Good Luck,

Allen Fletcher