No tax on $1,000,000 capital gains??

[Account Closed]

Hello Everyone,

I read that if you've lived in your home for the past 2/5 years and you are in the 0% income tax bracket, then all capital gains are tax free.

For example, if I retired in 2015 and receive no taxable income for the entirety of 2016 and sell my home with $1,000,000 in capital gains, I keep all of it since I'm in the 0% bracket.

Am I understanding this rule correctly?

Thanks,

-Sean

[Natalie Kolodij]

Nope. The IRS is mean, not stupid. 

The Capital Gain IS taxable income. So that $1,000,000 capital gain will knock you way out of the 0% tax bracket .