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If I have a gain on sale way over $750K, can I avoid cap gain tax if my income is in 15% bracket?

I recently went on unemployment. In 2009, my income will be only $30,000 or so. I heard that there's no cap gain on sales of your residence if you are in the 15% income tax bracket or less. I bought my house for $370,000 and my real estate agent said I can list if for $1,399,000. I'm single. I can exclude only $250,000 plus another $100K or so for improvements. 
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December 18 2008 - San Francisco
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Profile picture for erikaburke
Real Estate Agent
Contributions: 15

Ah - the old addage that we all cannot avoid death and taxes, although there is a real estate strategy that can assist you in deferring your capital gains payment through what is known as the Starker Exchange or the 1031 exchange.  This tax strategy can only be used if your property is NOT your primary residence (used as an income property).  Each persons financials are so individual that the best advice is that you contact a CPA specializing in real estate or a real estate tax attorney. You will find several in San Francisco who may be able to provide you with written general information, even  by e-mail.  I find them quite accessible and helpful when called upon.  Your realtor should be able to assist you with these contacts and be working to find answers to your questions and connect you with the right resource.

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January 01
Profile picture for danielle_lazier
Real Estate Agent

View my 5 listings

Contributions: 237
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Since October 2009

Here's what I know...

Per IRS rules, you can take tax-free capital gains of up to $250,000 (or $500,000 for two people) when you sell a principal residence that you've owner-occupied for at least 2 out of the past 5 years.

Of course, I am a professional San Francisco Realtor not a professional CPA or tax adviser. It is crucial that you get expert tax advice. Call your tax adviser or ask your agent for a recommendation.

In any event, that's an awesome amount of appreciation! Congrats.
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December 19 2008
 

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