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Denver, CO asked in Real Estate Law for Colorado

Q: I am selling my home here in Colorado and moving to the bay area in Texas. I paid 160000 and owe $90000. I have lived

Here 22 years and have made many improvements. I plan to buy a smaller place in Tx. The listing price is $550000. I am single and understand the first $250000 doesn't have capital gains. What about the rest of the profit?

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1 Lawyer Answer
Timothy Canty
Timothy Canty
  • Evergreen, CO
  • Licensed in Colorado

A: You must first calculate your cost basis which is the purchase price plus the cost of any improvements. Subtract that amount from the proceeds (minus costs of sale). The first $250,000.00 of profit is exempt from taxation. Anything over that is taxed at capital gains rates.

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