How Can I Be Exempt From Capital Gains?

How do you know if you can qualify to be exempt from capital gains tax? Actually, there are a few different stipulations involved.

Buying a home? Click here to perform a full home search
Selling a home? Click here for a FREE Home Price Evaluation 
Call me at (616) 447-7025 for a FREE home buying or selling consultation

I want to take some time to answer a question I’m receiving a lot lately, which is “How can I be exempt from capital gains?”

A lot of sellers right now feel nervous about listing their homes since values in our area have gone up so much. These sellers are worried about the taxes they’ll need to pay on the gains they earn from the property.

Truthfully, there are a few stipulations that need to be considered.

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There are a few stipulations that need to be considered.

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In order to be exempt from capital gains tax, the property will need to have been your primary residence for two out of the last five years. These years do not need to be consecutive.

Also, you can’t have exchanged or sold within the last two years, and the property cannot have been used for business or rental purposes.

If you are an individual, the sales price must not exceed $250,000. If you are a married couple, the sales price cannot exceed $500,000.

Finally, the last stipulation is that the property cannot be involved in a 1031 exchange. A 1031 exchange is an elevated way of deferring gains for investors. Chances are, this isn’t something most sellers are going to be involved in.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

The Costs Involved in Selling a Grand Rapids Property

Buying a home? Click here to perform a full home search
Selling a home? Click here for a FREE Home Price Evaluation 
Call me at (616) 447-7025 for a FREE home buying or selling consultation

I often get asked, “What are the costs involved in selling a property?” It’s not a very large list, but you do have some costs involved in selling a home. 

1. The brokerage fee. This goes to the agents involved in marketing and selling the property. 

2. Transfer tax and revenue stamps to the state of Michigan. This is basically a sales tax for selling the property in Michigan. 

3. Required title insurance. You will need an owner’s policy. 

4. Transaction fees. These include things like closing fees. If you have a well and septic, you will be responsible for those fees as well. 

Other things you may need to pay for include an optional home warranty or assisting the buyer with closing costs. There may be other costs specific to your transaction that get negotiated by your agent. 

If you have any questions, give me a call or send me an email. I would be happy to help you!