Tax Tips for Selling Your Home

Selling a home can be a complicated process but if sell at a gain, it can feel great! However, there are Irs laws associated to the sale of your home, especially if you have a gain. You need to know these rules as you go straight through the process, so that you have no surprises later. You might be eligible to exclude all or part of that gain from your income, but there are restrictions. Here are some tips from the Irs. Keep these things in mind when you begin the process of selling your home.

1. If you have owned and used your home as your customary residence for two out of the past five years prior to the sale, you are eligible to exclude the gain from your chargeable income. If you have more than one home, your customary residence is the one you live in most of the time. You will have to pay tax on any gains from selling a second or vacation home.

2. You might be able to exclude up to 0,000 of the gain, or 0,000 if you file jointly with a spouse. Worksheets are included in Irs Publication 523, Selling Your Home, to help you shape out the gain and how much you can exclude from income.

3. If you already excluded the gain from other home while the preceding two years, you can't do it again.

4. If you are eligible to exclude all of the gain, you don't have to description it on your tax return.

5. If your gain cannot be excluded, description it on agenda D, Capital Gains and Losses, with your Form 1040.

6. Unfortunately, you cannot deduct a loss!

7. When you move, don't forget to update your address with the U.S Postal aid and the Irs to ensure you receive refunds or correspondence. You can use Form 8822, change of Address, with the Irs.

8. And an extra note: if you received the first-time homebuyer reputation and within 36 months, you no longer use the home as your customary residence, you are required to repay the credit. You will need to use Form 5405, First-Time Homebuyer reputation and reimbursement of the Credit, with that year's return. The full estimate of the reputation will show up as added tax on your return.

For more information about selling your home, see Irs Publication 523, Selling Your Home.

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