Capital Gains and Tax Consequences of Selling a Second Home
AuthorKelsey Heath. Date:
A second property (even if lived in by the owner for several months of the year and not a rental property) is considered an investment property in the eyes of the IRS. Therefore, the capital gains tax exclusion does not apply to second or vacation homes. All sales profits are subject to capital gains tax, which can be new to many owners when it’s time for them to sell. If you sell a house for a profit, you benefit from capital gains. If you’re selling your primary residence, up to $500,000 of your gains are tax-exempt. But what are the tax consequences of selling a second home? This article explains how capital gains tax is applied to a second property and provides practical strategies for minimizing tax obligations. What Are Capital Gains Taxes? If you sell an investment, such as stocks, bonds, real estate, or valuable personal property for a … Continued
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