If a single owned house is sold for say 600k would that mean you be taxed on every dollar amount after 250k using the current rate ?

$500k for married.

Single person would be taxes on GAINS in excess of $250,000. Not sales price in excess of $250,000. I'm not reading your post that way. Sales price (net of selling costs) - cost basis (what you paid for the property + capital improvements) = GAIN.

There are also rules about how long your need to have lived in the property.

thank you for the clarification, thats what i wanted to know

OP - you also have to have lived there 2 of the last 5 years to get that exclusion. So if you bought the house less than 2 years ago, you pay tax on the gain.

How does the $250k tax free limit work on a property with a co-signer? Can either party take the profits without paying Capital Gains?

I would think it depends on who is on the title.

Thanks. Are there any tax implications of a parent "gifting" the profits of a home sale to a child?

DonaldFDraper said:

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Thanks. Are there any tax implications of a parent "gifting" the profits of a home sale to a child?

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I think it would be no different than if you gifted cash.

Gifting the profit to a child is not going to exempt you from having to pay tax on it. However, gifting the appreciated home to a charity allows you to deduct the full value of the home on your tax return as a charitable contribution.

What is the form or schedule to calculate profit on a home that was owned less than a year?

Regarding "capital improvements," what is needed to document those? For example, I added a big garage/patio 10 years ago that costed about 50k. However, I'm not sure what actual documentation I have of what I paid/cost.

Will depend on how you are structured, but it will probably be the Sched C, D, or E.

Receipts in case you get audited. I have used copies of checks or credit card transactions when I couldn't find a receipt. I don't know if IRS would accept that, but figured it was better than nothing.

"If you have gain that can't be excluded, you generally must report it on Form 8949, Sales and Other Dispositions of Capital Assets, and Schedule D (Form 1040), Capital Gains and Losses. Report the sale on Part I or Part II of Form 8949 as a short-term or long-term transaction, depending on how long you owned the home. For more information, see the Instructions for Form 8949."

If you don't meet the 2 out of 5 year test for exclusion, you can still partially exclude the gain for work-related, health-related, and other unforeseeable events (casualty losses and natural disasters) which may have caused you to move.

Are you still taxed if you buy another house in short amount of time and roll all gains over $250,000 into that house?

I believe so

Nm