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My wife and i just bought a house but due to new circumstances we may have to sell it less than a month after buying it (we cannot keep it vacant or rent it).

The house cost $160K. Say we sell it for the (extraordinary) price of $200K. From what I understand we would have to pay tax as we didn't live there for 2 years within the past 5 years. However considering our joint tax return, we are in the 15% bracket. Does that mean we would pay 0% tax on capital gain? If not, how much tax would we have to pay on this virtual sale of $200K?

  • What's your jurisdiction? – Grade 'Eh' Bacon Aug 3 '16 at 14:15
  • @Grade'Eh'Bacon - given the reference to 15% bracket having a 0% long term gain, I had a high confidence they are US. – JTP - Apologise to Monica Aug 3 '16 at 18:44
  • Yes this is in the US, and I am considered a US citizen for tax purposes, although I am originally from Europe. I have a follow up question to know if can benefit from partial tax exemption due to having a new job, and I assume it would be better suited to a new post. – michael Aug 3 '16 at 19:06
  • For the follow up questions I created a new post here – michael Aug 3 '16 at 19:30
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No, it appears you have a short term gain, less than one year holding period. Taxed at same rate at ordinary income. 15%, possibly pushing part of the number to 25%.

  • Thanks a lot for the answer. I had follow up questions, so I created a new post here. – michael Aug 3 '16 at 19:29

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