# Capital gains on sale of real estate

**URL:** <https://boards.straightdope.com/t/capital-gains-on-sale-of-real-estate/316321>\
**Category:** Factual Questions\
**Created:** [August 9, 2005, 7:38pm UTC](https://boards.straightdope.com/t/capital-gains-on-sale-of-real-estate/316321 "2005-08-09T19:38:50Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![Plan\_B](https://avatars.discourse-cdn.com/v4/letter/p/3ec8ea/32.png) [@Plan\_B](https://boards.straightdope.com/u/Plan_B)\
**Post date:** [August 9, 2005, 7:38pm UTC](https://boards.straightdope.com/t/capital-gains-on-sale-of-real-estate/316321/1 "2005-08-09T19:38:50Z")

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I’m thinking of selling my house and moving to a lower cost of living area. How much capital gains tax will I pay on the house sale?

Let’s use round numbers. Let’s say I bought the house for $100,000 and I sell it for $500,000. I have a profit of $400,000. I believe that if I buy a house for $500,000 or more I don’t pay capital gains. But what if I buy a house for $400,000, the amount of the profit? Do I pay on that transaction?

Also, I believe I can buy more than one property to avoid the tax. Is that right?

Finally, do I have to pay state taxes also?

Let’s not consider things like the one time exclusion for home sale.

Thanks.

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**Author:** ![Athena](https://avatars.discourse-cdn.com/v4/letter/a/35a633/32.png) [@Athena](https://boards.straightdope.com/u/Athena)\
**Post date:** [August 9, 2005, 8:01pm UTC](https://boards.straightdope.com/t/capital-gains-on-sale-of-real-estate/316321/2 "2005-08-09T20:01:48Z")

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You’re out of date on the details of capital gains on home sales; much of what you’ve stated refers to old tax law that no longer applies.

First off, there is no “one-time exclusion” anymore, nor is there any restrictions on the cost of the new house you buy. If you’ve lived in the house as a primary residence for more than two years, you can deduct up to $250K of the profit from the sale. If you’re married, it goes to $500K.

I dunno about state tax, or about buying more than one property. I’m also not a CPA, so don’t put too much trust in what I say. Go talk to your accountant.

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**Author:** ![Crotalus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/crotalus/32/41_2.png) [@Crotalus](https://boards.straightdope.com/u/Crotalus)\
**Post date:** [August 9, 2005, 8:34pm UTC](https://boards.straightdope.com/t/capital-gains-on-sale-of-real-estate/316321/3 "2005-08-09T20:34:00Z")

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Athena is right. The IRS (they’re here to help!!) has a pretty clear, brief blurb about it [here](http://www.irs.gov/businesses/small/industries/article/0,,id=98921,00.html).