Some Reminders If You Are Selling Your Home

Summertime and the moving trucks are busy.  If you are selling your home, here are some important reminders:

  • Some or all of your gain may be excludable from income tax.  Have you owned your home as your primary residence for five years?  Have you lived there for at least two years?  If the answer is yes to both of these questions, you may be able to exclude up to $250,000 of any gain if you are single, and if you file a joint return with your spouse, you may be able to exclude up to $500,000 of gain. 
  • If you experience a loss when selling your main home – you sold it for less than you paid for it – unfortunately, this loss is not deductible. 
  • If you own more than one home, you are only able to exclude the gain on the sale of your main home.  Any gains on homes other than your primary residence are not excludable and are subject to tax on any gain.
  • You must report forgiven or canceled debt as income on your tax return.  This is if you had a mortgage workout, a foreclosure or other canceled mortgage debt. 
  • There are exceptions to these rules for certain persons, such as someone with a disability, military, intelligence community and Peace Corps workers.  Check with a tax advisor to determine if you are eligible.

Once again, I encourage you to visit irs.gov for additional information to assist you when selling your home.  Worksheets are included in Publication 523 – Selling Your Home which can help with determining the amount, and your eligibility of excluding gain on the sale.

Happy packing and moving – and enjoy your new home.

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