Can someone help me understand capital gains tax?

The rule states that you must have occupied the residence for at least two of the last five years in order to avoid capital gains tax.

Did he stutter?

For a personal residence, I think you get to exclude $500K if married and $250K if single.

LINK

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But does he have to meet the 2 year residence rule first to enjoy the $250/$500 exemption?

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Yes.


From the link makersmark1 provided:

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To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

Owned the home for at least two years (the ownership test)
Lived in the home as your main home for at least two years (the use test)

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The rule states that you must have occupied the residence for at least two of the last five years in order to avoid capital gains tax.

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There are some exceptions to the two year rule that would allow a partial exclusion. Mainly, the house you are in has to no longer be workable due to relocation (more than 50 miles away) or change in family size.

OP, remember the gain is (selling price) less (purchase price of home) less (costs to sell home). Nothing to do with amount of cash put up, mortgage balance, etc.

30K profit

I have no idea. All I have is XOM stock and I don’t want to sell it.

I don’t own a credit card

Thinking about just asking the buyer to move in while I pay the note until June and then signing the paperwork at that time.

Maybe you can set it up as a lease for a few months then sale later. Don’t just let them move in though.