understanding capital gains on primary residence sale

[Heather Klompmaker]

Hi All,

We are considering selling our primary residence which we have remodeled and now have some equity in. We plan to sell for 200,000 and purchased for 145,000. Our mortgage balance is now 128,000. I have been reading up on capital gains and am confused about a couple of things. I know that we don't meet the exclusion of capital gains because it's been less than 2 years and we don't meet any of the special circumstances. On one website I read that if your AGI is less than 70,200 (married filing jointly) then you don't pay capital gains taxes. Is this accurate? If we don't have to, then that makes selling appealing, but if we do obviously less appealing! If we do have to sell can we subtract closing costs from when we purchased as well as our selling costs (realtor fees, transfer tax, etc) and our remodeling costs? Thanks so much in advance for your responses!