I bought my 2-family house in 2001 for $400,000, in the past 5 years I've occupied one unit and rent out one unit. In early 2006 I spent $100,000 to renovate the whole house, I plan to sell the house for $650,000, how much capital gain tax will I pay?
by 
kanway74
ANSWERS: 3
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What country are you in please?
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According to current tax laws, you could pay over 15% on anything over $250,000. That means upwards of $60,000 in tax. I suggest you contact a tax professional instead of a Q&A website.
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You can use the primary residence exemption on the half you lived in ($250,000 for single person, $500,000 for joint-filing). You may be able to do a 1031 exchange on the other half if you are planning on reinvesting that half into another investment property. Section 1031 of the IRS Tax Code allows you to defer the capital gains tax on income, investment, and/or business property when you use the proceeds from the sale of the property to purcahse another investment property. You should contact a 1031 professional, known as Qualified Intermediaries, if you want more information on this - www.1031taxinfo.com has great information on 1031 exchanges as well.
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