When you are selling your home, one of the fundamental tax comes into the picture is capital gain tax. Here are 6 home facts you need to know.
1. If you’ve owned and lived in your home for 2 of the 5 years before selling it, you can generally exclude up to 250,000 of the gain from your income. ($500,000 on a joint return in most cases.)
2. You are not eligible for this exclusion if you sold another principal residence within the past 2 years and excluded the allowable gain from your income.
3. If you can exclude ALL the gain from the sale of your primary residence, you don’t need to report the sale on your tax return. Please consult with your tax consultant before you do so.
4. If you have a gain on your principal residence that exceeds the allowable deduction, it is taxable.
5. You can’t deduct a loss from the sale of your primary residence.
6. Special rules may apply when you sell a home for which you have received the first-time home buyer credit
Disclaimer: – Please note, I am not a tax consultant. Please use the above information as a general guideline. I will strongly suggest that you should consult with your tax consultant for any home-selling tax-related questions.