- Special Sections
- Public Notices
Now that the housing market has finally begun to stabilize and interest rates remain at historically low levels, more and more homebuyers and sellers are dipping their toes back in the water.
If you’re planning to sell your home, you need to understand the tax implications of selling a home as well as be aware of structural and cosmetic flaws in your home and neighborhood that could undermine your asking price or keep the property languishing on the market for months.
First, the tax tips:
• In general, if you make money on the sale, you can exclude the gain from your taxable income (as outlined below) if you’ve owned and used the home as your
residence for two out of the past five years.
• You may be able to exclude up to $250,000 of the gain from your income ($500,000 on most joint returns).
• If you can exclude all of the gain, you don’t need to report the sale on your tax return.
• Gains that cannot be excluded are taxable.
• You must report them on Form 1040, Schedule D. You cannot deduct a loss from the sale of your main home.
* For more information, see IRS Publication 523, Selling Your Home (at www.irs.gov).
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