In this market sellers who have owned their properties for awhile are seeing appreciation beyond their wildest dreams. It is wonderful to walk away with several hundred thousand dollars after selling but the government wants a piece of that gain through a tax called “capital gains tax.”
This tax can vary depending on how long you have owned the house, if you have lived in the house for two of the last five years, what home owner’s exemption you get, what your basis is, and what your income is at the time of the sale. There are lots of pieces to consider. The best article I have seen on this was in Zacks. Click here to get the scoop from a professional in finance. Always consult your own tax professional to make sure you are getting the best tax treatment available for your situation.