Where Form 4797 Exclusion 2022-2023

Hi guys, this is Toby Mathis from Anderson Business Advisors. Today, we're gonna talk about selling your house. Specifically, we'll be focusing on selling a house that has been your personal residence for at least two of the last five years. This excludes vacation homes or any other properties that you haven't lived in as your primary residence. To qualify for the capital gains exclusion, you need to have lived in the house for 24 out of the previous 60 months before selling it. Keep in mind that any asset you own, including your car and house, is considered a capital asset. If the value of the asset has increased since you purchased it, you may have a taxable gain when you sell. Let's say you bought a house and its value has gone up. You would have a capital gain. However, if the value has decreased or if you've used it for personal purposes, you won't be able to write it off. This is why buying a house as a rental property can have certain tax advantages. When it comes to selling a house, there is an exclusion to capital gains called 1:21 exclusion. This is found in the Internal Revenue Code. If you meet the certain tests, you can exclude a certain amount of capital gains from your taxes. For individuals, the exclusion is up to $250,000 and for married couples filing jointly, it's up to $500,000. For example, if you bought a house for $100,000, lived in it as your primary residence with your spouse for ten years, and sold it for $600,000, you wouldn't have to pay any capital gains tax. As long as you lived in the house as your primary residence for two of the last five years and didn't rent it out, you qualify for the exclusion. It's...