What taxes do capital gains from primary residence affect?

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Stuckinmn
Posts: 35
Joined: Mon May 13, 2019 5:11 pm

What taxes do capital gains from primary residence affect?

Post by Stuckinmn »

I'm aware that you can avoid paying tax on up to 250k of capital gains from the sale of a primary residence. However, are there other areas this gain may affect or is it not even required to be included in your tax forms if under 250k?

Specifically, if I had a 200k gain, is any of that included for determining if I exceed certain AGI thresholds (education credits, roth contribution eligibility, etc) or for ACA subsidies?

Thanks
fyre4ce
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Re: What taxes do capital gains from primary residence affect?

Post by fyre4ce »

I’m not aware of any effects from excluded gains on a primary residence. It’s not included in Adjusted Gross Income, and not in any of the various Modified Adjusted Gross Income calculations. Specifically, it doesn’t look to be included in income for ACA subsides:

https://www.healthcare.gov/income-and-h ... come/#magi
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FiveK
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Re: What taxes do capital gains from primary residence affect?

Post by FiveK »

Not for federal taxes, but there are some state credits that could be affected - such credits may or may not be relevant to your particular situation.
Topic Author
Stuckinmn
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Joined: Mon May 13, 2019 5:11 pm

Re: What taxes do capital gains from primary residence affect?

Post by Stuckinmn »

Thank you both. Very helpful.
Chadnudj
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Re: What taxes do capital gains from primary residence affect?

Post by Chadnudj »

Stuckinmn wrote: Tue Jun 06, 2023 9:21 pm I'm aware that you can avoid paying tax on up to 250k of capital gains from the sale of a primary residence. However, are there other areas this gain may affect or is it not even required to be included in your tax forms if under 250k?

Specifically, if I had a 200k gain, is any of that included for determining if I exceed certain AGI thresholds (education credits, roth contribution eligibility, etc) or for ACA subsidies?

Thanks
Follow up on this (for anyone who knows):

If I have carryover tax losses from tax loss harvesting (say $20k in carryover losses, which would absent any capital gains be used $3k at a time to offset income), and then sell my house and have capital gains on the sale that by themselves are below the taxable threshold (i.e. a $100k gain), do I nonetheless need to apply my carried over tax losses to that capital gain (i.e. apply that $20k in tax losses to my $100k capital gain for the primary residence sale, using it up, and thus not having it anymore to offset income)?
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Artsdoctor
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Re: What taxes do capital gains from primary residence affect?

Post by Artsdoctor »

Chadnudj wrote: Wed Jun 07, 2023 7:39 am
Stuckinmn wrote: Tue Jun 06, 2023 9:21 pm I'm aware that you can avoid paying tax on up to 250k of capital gains from the sale of a primary residence. However, are there other areas this gain may affect or is it not even required to be included in your tax forms if under 250k?

Specifically, if I had a 200k gain, is any of that included for determining if I exceed certain AGI thresholds (education credits, roth contribution eligibility, etc) or for ACA subsidies?

Thanks
Follow up on this (for anyone who knows):

If I have carryover tax losses from tax loss harvesting (say $20k in carryover losses, which would absent any capital gains be used $3k at a time to offset income), and then sell my house and have capital gains on the sale that by themselves are below the taxable threshold (i.e. a $100k gain), do I nonetheless need to apply my carried over tax losses to that capital gain (i.e. apply that $20k in tax losses to my $100k capital gain for the primary residence sale, using it up, and thus not having it anymore to offset income)?
No. Your capital gains from your house (here, $100,000) would not be reportable so your carryover loss would remain as it is.
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MP123
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Re: What taxes do capital gains from primary residence affect?

Post by MP123 »

Chadnudj wrote: Wed Jun 07, 2023 7:39 am If I have carryover tax losses from tax loss harvesting (say $20k in carryover losses, which would absent any capital gains be used $3k at a time to offset income), and then sell my house and have capital gains on the sale that by themselves are below the taxable threshold (i.e. a $100k gain), do I nonetheless need to apply my carried over tax losses to that capital gain (i.e. apply that $20k in tax losses to my $100k capital gain for the primary residence sale, using it up, and thus not having it anymore to offset income)?
If you are able to exclude the entire gain on the home sale then there is no gain to apply the carryover loss to.

But note that taking the exclusion isn't required. You might decide to apply the carryover loss to the gain on this home sale instead, especially if you want to use the exclusion against another home sale in the next two years, or if you have a very large carryover loss and relatively small gain.
Chadnudj
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Re: What taxes do capital gains from primary residence affect?

Post by Chadnudj »

Artsdoctor wrote: Wed Jun 07, 2023 8:27 am
Chadnudj wrote: Wed Jun 07, 2023 7:39 am
Stuckinmn wrote: Tue Jun 06, 2023 9:21 pm I'm aware that you can avoid paying tax on up to 250k of capital gains from the sale of a primary residence. However, are there other areas this gain may affect or is it not even required to be included in your tax forms if under 250k?

Specifically, if I had a 200k gain, is any of that included for determining if I exceed certain AGI thresholds (education credits, roth contribution eligibility, etc) or for ACA subsidies?

Thanks
Follow up on this (for anyone who knows):

If I have carryover tax losses from tax loss harvesting (say $20k in carryover losses, which would absent any capital gains be used $3k at a time to offset income), and then sell my house and have capital gains on the sale that by themselves are below the taxable threshold (i.e. a $100k gain), do I nonetheless need to apply my carried over tax losses to that capital gain (i.e. apply that $20k in tax losses to my $100k capital gain for the primary residence sale, using it up, and thus not having it anymore to offset income)?
No. Your capital gains from your house (here, $100,000) would not be reportable so your carryover loss would remain as it is.
Thanks to you and MP123 for the answers!
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