The phrase "capital gains tax" has the power to create fear in the heart of many homeowners, especially those with plans to sell in the near future.
If you are planning to sell your home soon and already worrying about your capital gains liability, the information in this article can help you understand the meaning of the law, and help you determine how, or if, the capital gains tax will affect you with the sale of your home.
What is the Capital Gains Tax?
As the Internal Revenue Service (IRS) explains, nearly everything owned or used for personal or business use is considered a capital asset, including your home and even your furniture and other personal possessions. Capital gains taxes are calculated by computing the difference of the basis…