Do I Pay Taxes On The Money I Made On My House?

By
Real Estate Broker/Owner with Reputable Realty # 01804752
  •  
  • What is a capital gain?
  • https://www.irs.gov/taxtopics/tc409
  • Pulled straight off the IRS website....Almost everything you own and use for personal or investment purposes is a capital asset. Examples include a home, personal-use items like household furnishings, and stocks or bonds held as investments. 

          So does that mean when you sell your home you will owe taxes?

           Not necessary.   See what AIME has to say about exclusions for capital gains.

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  • Primary Residence Exclusion: If you sell your primary residence (the place you live in), you might be eligible for an exclusion. In the U.S., for instance, if you've lived in your home for at least two of the last five years, you can exclude up to $250,000 of capital gains if you're single, or up to $500,000 if you're married and filing jointly.
  •  
  • 1031 Exchange: This is a nifty tax strategy that allows you to defer paying capital gains tax when you sell an investment property, as long as you reinvest the proceeds into another similar property. It's like a swap, but for real estate.
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  • Inheritance: If you inherit real estate, the tax basis is usually "stepped up" to the property's current value. This means that you'll only pay tax on any increase in value from the date you inherited it.
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  • Gifts: If someone gifts you real estate, you'll generally assume the giver's original cost basis. If you later sell it, you'd only owe capital gains tax on any appreciation from that point.
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  • Certain Special Circumstances: There are some unique situations, like if you're in a low-income housing program or if your property is part of a conservation program, where you might get special tax treatment.

Remember, tax laws can be complex and can vary by country, state, or even city, so it's always a good idea to consult with a tax professional or accountant who's up-to-date on the latest regulations. They can help you navigate the specifics of your situation. Hope this helps clarify things!

AIME if you are new to my blog is my AI me. She helps me coordinate my thoughts.

Advice from Karen, Talk to your tax professional.  Talk to them before you make a major decision that could cost you more in taxes than you wish to pay. 

More information on a 1031 exchange info coming soon~

 I service the Victor Valley of CA, and the Hil County area deep in the heart of Texas.

I'm Karen Sanchez

REALTOR

 
"Marketing your house like no one else will "
760..684.0250

Licensed in two states, CA and TX

Working the Victor Valley, and South Bay area. Some other So Cal areas by request and the Hill Country of Texas.

Legal stuff to follow 

Karen L. Sanchez 
Broker Repulatable Realty
                 #01804752
Email: karen@karensoldit.net
 
Berkshire Hathaway HomeServices
Don Johnson Realtors New Braunfels TX
Cell: 760-684-0250
Office: 830-624-8272]
karensoldit@yahoo.com
Texas Real Estate Commission  Information About Brokerage Services
Texas Real Estate Commission Consumer Protection Notice

Comments (3)

Charles Ross - eXp Realty LLC
eXp Realty LLC Salina Group - Salina, KS
Love To Help People

Hi Karen! Your post provides much-needed clarity on capital gains and the potential tax implications of selling a home. 💰 The information on primary residence exclusion and the 1031 exchange is especially helpful for homeowners.

Oct 24, 2023 05:57 PM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

One of the things that jumped out at me is that people who inherit real estate should get an appraisal/price assessment asap after receiving it. Just to know the value at inheritance.

Oct 25, 2023 04:41 AM
KAREN SANCHEZ

Right!  We can help them with that.  They don't have to have an appraisal.  Of course in some cases they do need an appraisal.   Does that sound like Realtor double talk?   I've done a bunch of them.

Oct 25, 2023 08:01 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Karen, usually if a home has been their primary home for 2 years, they won't have to, but always recommend a CPA.

Oct 29, 2023 01:33 PM