If I bought a property for $ 136,000 years, and now the bank $ 350,000 will be refinanced, and it sold for $ 450,000, how do I know what I’m taxes.

If the property was your principal residence for at least 24 months within the last five years, you get an exclusion of $ 500,000 for married joint statement and another $ 250,000 for most people.

If you have made improvements, these costs are added to base cost. Some closing costs that you have purchased may also be added based on cost. (Title search, title insurance, legal and real estate commissions are the most common.)

Let’s say you pay no closing costs when you purchased the property and will not sell if you are. Your capital gain would be $ 450,000 minus the cost basis of $ 136,000 or $ 314,000 be. The amount of the mortgage is irrelevant.

Can you ignore most of what I wrote above, if the property was rented. You need to have been deducted to recover some or all of the depreciation costs in recent years. If it is a rental property, you have to see a tax professional before doing anything. There are several ways to reduce your taxes on the sale, but you need to do before the sale of the property.

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