One thing I didn’t consider all is the income taxes… Maybe someone could chime in on this, because I’m too lazy to look things up.
Suppose someone has a household income (couple) of
$150k in W2 salary
$40k in long term capital gains from stock sales
Person is now considering selling primary home for $300k profit…
What are the tax implications?
1. I think the W2 salary income $150k still gets taxed the same regardless of one sells the home or not.
2. The $300k gain from the primary home sales is tax free, due to primary home capital gains exclusion of up to $500k for a couple
However,
3. Would $40k long term capital gains from the the stock sales end up being taxed at 20% instead of 15% ( since the household’s AGI > $450k) ? Someone correct me if I’m wrong…
4. Would the $40k in investment income then be subject to the 3.8% medicare tax surcharge (which kicks in on the any “net invest income” for folks with an AGI >$250k/household)?….
If #3 and #4 is true, then I guess the solution would be don’t sell any stock that year if your normal AGI isn’t already hitting those thresholds…
