Sold house due to job relocation, what, if any would capital gains rate be?

I will try to give as much detail to our sale in as direct, cut and dry terms as possible.

Married filing jointly with 2 kids. 1 income family.

Bought home in Seattle in Sept 2004.
Sold Seattle home in June 2006–net profit $55K
Bought Boston home in August 2006. Husband works for major corporation with worldwide locations that acquired a small company in the Boston area. This opened up options for a transfer. We accepted a transfer with relocation package and sold our Seattle home, buying a replacement home in the Boston area immediately. Clearly we are more than 50 miles away, but are we able to use this exemption as we applied for the transfer? With the transfer came a promotion and significant raise with more job growth possibilities. If so is it a complete exemption or just a percentage off?

Also, we recieved $10K in relocation money, are we responsible for taxes on this? What moving costs are deductible? Would our airfare be? Temp housing?

Thanks!

If you’re married your exemption on the gains on the house are $500,000 ($250K if single). Your problem is you didn’t own/reside in the house for two out of the previous five years before you sold it. You will probably have to pay cap gains tax on a pro-rated basis. You should consult an accountant.

You will pay income taxes on the relo money. Airfare and temp housing are deductible and some moving costs. Again, talk to an accountant.

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