Bought house in 1998 for $850k, primary residence the whole time, thinking about selling it now for $2.2M
Is there Fed or Calif income tax on the profit?
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Have you ever claimed a home office, etc? ("Depreciation recapture" adds a twist, but it's not rocket science)– user662852Apr 21 '16 at 11:25
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Both California and the Federal Government allow you to exclude $250,000 (single) or $500,000 (couple) of profit. So in your case, $1.35M would be exlcluded (basis $850k plus $500k exclusion), plus any amount you paid for capital improvements (consult your tax accountant for details on that).
Beyond that amount, the rest of the sale (so in your case, about $850k) would be subject to capital gains tax (Federal and State). You'd likely pay around 24% to 29% tax on the gain between the two, unless other relevant details apply.
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@DougNull Yes, it would be long term, given what you said in the question. Federal rate is 15 to 20 % depending on your other income, and California is likely 9.1%.– JoeApr 21 '16 at 1:54