Will You Owe Capital Gains When Selling Your Jersey Shore Home

Something to consider when selling your home is the Capital Gains ramifications. Will you owe Uncle Sam money after the sale of your Jersey Shore home? Capital Gains are calculated as the difference between what you paid for your property and what you sell it for. Here is how you calculate your Capital Gains. 

tax timeCalculating Capital Gains

(+) PURCHASE PRICE – Price paid for property

(+) COST OF PURCHASE – Transfer fees, attorney fees, inspections

(+) COST OF SALE – Repairs, commissions, attorney fees, inspections

(+) COST OF IMPROVEMENT – Room additions, deck, for example, though not replacing existing

(=) ADJUSTED COST BASIS OF YOUR HOME

(-) AMOUNT YOU SELL YOUR HOME

(=) CAPITAL GAIN 

A Special Real Estate Exemption for Capital Gains

Even though the above calculation may indicate you owe Capital Gains, there is a special real estate exemption. Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a Jersey Shore home is exempt from taxation if you meet the following criteria: 

  • You have lived in the home as your principal residence for two out of the last five years. 
  • You have not sold or exchanged another home during the two years preceding the sale. 

NOTE: As of 2003, you may also qualify for this exemption if you meet what the IRS calls “unforeseen circumstances” such as job loss, divorce, or family medical emergency. 

Learn more about selling your Jersey Shore home by visiting PatrickParkerRealty.com.

Search all Jersey Shore homes for sale

Always consult a tax attorney regarding current tax laws.

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About Patrick Parker Realty

Patrick Parker Realty, an independent boutique brokerage located in the heart of Bradley Beach is your local market leader. We understand the demands of a changing real estate market and avail ourselves of the latest industry information and tools to ensure excellent results. Our Commitment to You Our seasoned Real Estate Agents are committed to providing all of our clients, from first time sellers to veteran real estate investors, quality and friendly service. We walk you through every step of the sale process offering the guidance, feedback, and expertise needed to ensure your complete satisfaction.
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