Death and taxes really are all that's certain in this world.
Hopeful homeowners have a lot to consider when transitioning from renting to owning – taxes included. But what about sellers? What tax implications can they expect?
Sellers can avoid capital gains taxes by taking advantage of exclusions. The tax code allows individuals to exclude up to $250,000 from the sale of their primary residence; married couples filing jointly can exclude up to $500,000.
In order to qualify for this exclusion, sellers must meet certain ownership, use and timing qualifications. The home must be owned and lived in for a minimum of 2 out of the last 5 years before the sale.
If you don’t meet those requirements, you can take a partial exclusion for cases involving circumstances such as divorce, job loss or health issues.
However, if your agent issues a 1099-S form indicating the sale of your home, it must be included on your return.
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The preceding was adapted from RISMedia.com – original content can be found here.
