Challenge #362: Capital Gains Tax when Selling a Home

A solution to last week’s challenge can be found here.

To solve this week’s challenge, use Designer Desktop or Designer Cloud Trifacta Classic.

If you are currently selling your home, you may not be happy to learn that capital gains (profit from the sale of the home) are taxable in the United States. One way to reduce the amount of capital gains taxes you pay is to use deductions.

For this challenge, we will use two possible deductions, the Exclusion of Gain (you may qualify to exclude up to $250,000 of the capital gain from your income as a single filer, or up to $500,000 of that gain if you file a joint return with your spouse); and Capital Improvements (when home sale profits exceed the exclusion of gain threshold, consider deducting any capital improvements you made to the home while you owned it).

Your challenge is to answer two questions:

Identify which home sellers will have to pay taxes on the profit made from the sale of their home.
Determine how much those sellers have to pay.

Use the information below to calculate and determine who should pay taxes.

Source: https://www.homelight.com/blog/tax-write-offs-for-sellers/#:~:text=Page 9 of IRS Publication,retaining wall or swimming pool

DISCLAIMER: This challenge is meant for educational purposes only and is not intended to be construed as financial, tax, or legal advice.

Sellers_Info.csv

Home_Expenses.csv

challenge_362_start_file.yxzp

2023 Tax Rates Capital Gains_Table.xlsx

Capital_Gains_Weekly_Challenge_Cloud_Solution.zip

challenge_362_solution.yxmd

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Intermediate

Data Preparation

Accepted answers

All comments

benjimoser

My Solution. But would the "overage" not only be the part of the "capital gain" which is above the "exclusion of gains" value?

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challenge_362_Benji.yxzp

mmontgomery

Watch that overage!

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Flo_P

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Includes the automatic transformation of the tax rates input

challenge_362_solved_FPER.yxzp

Luke_C

I don't think the gain exclusion is included in the solution (though speaking as a CPA there's not enough information to say if it technically should be 😂).

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challenge_362_start_file.yxmd

Kenda

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362ks.yxzp

Kenda

@Luke_C I thought the same thing at first after reading just the directions. If you look at the image included in the workflow, though, it suggests a bit of a different calculation.

acarter881

Here's my solution. I tested my multi-row formula that allocates the percentage to pay with varying amounts. I believe that isn't the intention of the challenge, but it is a bit more dynamic as a result.

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challenge_362_start_file.yxmd

dougbaron

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samihamaipady

My Answer

challenge_362_sam_solution.yxmd

ARussell34

What a fitting and still confusing topic (for me at least) for this week's challenge.

AR_challenge362_sol.yxmd

patrick_digan

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challenge_362_start_file.yxmd

FrederikE

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lucascs

solved, not nice...

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kaiserj

solved

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FinnCharlton

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this was taxing

challenge_362_complete.yxmd

eacheson

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challenge_362_start_file.yxzp

DataNath

My solution to #362.

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Challenge 362 completed.yxmd

Clifford_Coon

My Solution (like others the Exclusion doesn't seem to be included in the example solution output)

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challenge_362_solution_ccc.yxzp

SandroGerber

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Followed the provided output and thus "incorrectly" ignored the exclusion of capital gains

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NathalieHP

My solution:

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challenge_362_start_file.yxmd

jhonken

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this was a fun one! here are a couple IRS links to relevant info. I've run into this with having moved many times! https://www.irs.gov/taxtopics/tc701 and https://www.irs.gov/publications/p523

challenge_362_honken.yxmd

balajilolla1

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Solution Attached

challenge_362_start_file.yxmd

AkimasaKajitani

My solution.

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challenge_362_start_file_AK.yxzp

TonyAndriani

My solution includes the exclusion. At first I thought that the provided solution was ignoring the capital gains exclusion, but then I realized that, if that was the case, then everyone would have had to pay capital gains. Looks like they may have misunderstood the exclusion and assumed that any home where total capital gains was less than the exclusion would not pay any tax, but if the total gains exceeded the exclusion amount then tax was due on the total.

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challenge_362_TonyA.yxmd

niklas_greilinger

My Solution.

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challenge_362_NG.yxmd

kelvin_law1

Here is my solution:

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challenge_362_solution.yxmd

hansfinesse

A little long but gets the job done

362 done.yxmd

sergejs_kutkovics

My try!

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challenge_362_SK.yxmd

olga_strubbe

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A neat challenge, thank you! It looks like the Exclusion of Gains was not taken out in the output provided with the starter challenge.

challenge_362_solution_OS.yxmd

alexnajm

Good one!

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challenge_362_start_file_Alex Abi-Najm.yxmd

RolandSchubert

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minh6990

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challenge_362_minh6990.yxmd

CharlotteGuy

Yes, It would be amount after the exclusion.

AaronSmatta

I excluded the exclusion amount from the total amount that is subject to taxes and I also calculated the taxes based off the brackets in that each tranche would be taxed at the specific rate as opposed to just taxing the entire "overage" by the percent bracket that they ultimately fall under.

challenge_362_start_file - AT.yxmd

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