How Selling Your Home Can Impact Your Taxes
If you sell your home, you may or may not have to pay taxes on the money you gain from the sale. Listed here are some things for you to keep in mind while planning the sale of your home
- Exclusion of Gain - You may be able to exclude all or part of the gain if you meet the eligibility test. One example is you must have owned and used it as your primary residence for at least two of the five years before it sold.
- Exclusion Limit - The most you can exclude from tax is $250,000 when filing Single and $500,000 for Joint filing. If you sold the home at a loss, you cannot deduct the loss on your return.
- Exclusion Frequency - Generally, you may exclude the gain only once every two years. However, there may be some exceptions to this rule.
Some helpful resources are Publication 523 and Net Investment Income Tax, both found on www.irs.gov. If you have any questions, be sure to contact your accountant to help clarify. Also, if you move, be sure to let us know by using our Contact Us form.