Tax Benefits for Home Sellers
Uncle Sam is very generous when it comes to tax benefits for sellers. If you’ve considered selling your home, tax breaks make anytime a great time to sell! Single sellers are tax exempt on profit received up to $250,000 through a sale, while married sellers are tax exempt on profit received up to $500,000 from a sale. These sellers must have lived in their homes as primary residences for at least two years (these don’t have to be consecutive) but here’s the truly amazing part- there is no limit to the number of times sellers can take advantage of these tax benefits! Military sellers are exempt from the two-year primary residence rule, but can still get the same tax benefits. A nice perk is that sellers are not required to buy another home with these earnings. They can take that cruise around the world they always wanted to instead!
Reduce Taxable Gains
Despite tax laws, sometimes sellers may still face taxable gains when they face the possibility of selling a home. Additional ways to lessen potential gains include deducting the following:
- Necessary Repairs and Updates. All the preparations made to ready a house to sell in terms of improvements to the property (painting, flooring, landscaping, etc.) all qualify if they are completed within 90 days of the sale with the specific intent to help attract a buyer
- Concessions. Paying closing costs or additional concessions for your home’s buyer
- Commission. The commission paid to the real estate agent who sells your property is also considered a necessary expense
- Moving. Costs associated with moving when you’re selling because of a full-time job that is at least 50 miles away
This information is deemed reliable of a general nature and should not be acted upon without further guidance or assistance from a tax professional. Please consult your tax professional before taking any action. Additionally, not all loan products are the same. Please call us to learn more about what may be available based on your unique situation.