What Are the Capital Gains Taxes When Selling a Home in Palm Beach Gardens, FL?

Question: What are the capital gains taxes when selling a home in Palm Beach Gardens, FL?

Answer: Capital gains taxes may apply if you profit from selling your home in Palm Beach Gardens, but many homeowners qualify for exemptions that reduce or eliminate the tax.

Understanding Capital Gains Tax

When you sell a home for more than you paid, the IRS considers the profit taxable income. This is called capital gains tax. However, U.S. tax law provides significant exemptions for homeowners, and Florida has no state income tax, which benefits Palm Beach Gardens sellers.

Federal Exemptions for Homeowners

If the home has been your primary residence for at least two of the last five years, you may exclude up to $250,000 of profit if you’re single, or $500,000 if married filing jointly. For example, if you bought a home in Artistry for $600,000 and sell it for $900,000, a married couple could exclude the $300,000 gain entirely.

When Capital Gains Taxes May Apply

You may owe capital gains tax if:
• The property is not your primary residence (investment or rental property).
• You owned the home for less than two years.
• Your profit exceeds the federal exemption limit.
• You’ve already used the exemption on another property in the last two years.

Capital Gains Tax Rates

The tax rate depends on your income and how long you owned the property:
• Short-term (owned less than 1 year): Taxed as ordinary income.
• Long-term (owned more than 1 year): Taxed at 0%, 15%, or 20% depending on income level.

How to Reduce or Avoid Capital Gains Taxes

• Use the primary residence exemption.
  • Time your sale to meet the two-year ownership rule.
  • Add improvements and selling costs to your cost basis.
  • Consider a 1031 exchange if selling an investment property.
  Always consult a tax professional for advice specific to your situation.

Example From Palm Beach Gardens

A homeowner in PGA National who purchased a property for $500,000 five years ago and sells it for $850,000 today would have a $350,000 gain. If married filing jointly, $500,000 is excluded—so no federal tax is owed. If single, $250,000 is excluded, and $100,000 would be taxable at the long-term capital gains rate.

Legal and Compliance Considerations

While real estate professionals like Coastal Florida Homes Led By Jeff Orr can guide you on the basics, capital gains tax is a legal and financial matter. Always consult a licensed tax advisor or CPA before selling. Our role is to connect you with the right professionals while ensuring your transaction complies with NAR ethics and Florida law.

Final Thoughts

Capital gains taxes can significantly impact your profit when selling a home in Palm Beach Gardens, but many homeowners qualify for exemptions that reduce or eliminate what they owe. With guidance from Coastal Florida Homes Led By Jeff Orr and your tax professional, you can plan a sale that protects your financial outcome.

📞 Planning to sell your Palm Beach Gardens home? Contact Coastal Florida Homes Led By Jeff Orr today to get expert guidance and a referral to trusted local tax professionals.