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How much tax will we have to pay on the sale of our main home in Seattle?

Question:
We are selling our home in Seattle and relocating to California. The value of our home has risen by more than the $500k exclusion for a married couple, even when we take out expenditure on improvements. Will we have to pay capital gains tax on the extra profit even if we are re-investing in another property in California as our main home?

Answer:
Because you are married and you both ahve lived in the home you will each be able to exclude $250,000 of the gain from your taxable income, or a total of $500,000. Any gain above this is taxed at 15% for federal taxes and at whatever your state rate is. Not a bad deal.
Reinvesting went away when they did away with once in a lifetime $125,000 exclusion.
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