A retired couple is selling their home for a $620,000 profit and may owe capital gains taxes on some of that profit. The IRS allows an exclusion of $250,000 for single filers and $500,000 for married, joint filers when selling a primary residence. Calculating capital gains involves subtracting the asset’s cost basis from its sale price, which includes upgrades and improvements. Tax liability depends on eligibility for Section 121 Exclusion and marital status. Couples downsizing for retirement must consider capital gains tax rates and consult a financial advisor for tax planning.

When selling a primary residence, the IRS allows an exclusion of $250,000 or $500,000 in capital gains. Tax is owed on any profits exceeding the exemption, depending on marital status and Section 121 eligibility. A financial advisor can help navigate tax implications of real estate transactions and long-term financial planning. To calculate capital gains tax liability on various assets, including securities, use a capital gains tax calculator. It’s advisable to keep an emergency fund in a liquid account to cover unexpected expenses.

Read more at Yahoo Finance: I’m Downsizing My Home and Netting $620k for Retirement. Will I Owe Capital Gains Taxes?