I’m not sure if my title makes any sense. But let me explain it here more in depth.
Our family originally bought the home originally for $200,000. The house has been paid off many years ago. However, we decided to do a $650,000 cash-out refinance for the home. So let’s say we decide to sell the home later down the road for $1.2million. Would we be taxed for the profit of the $550,000? Or from the original purchase price?