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Ten Tax Tips for Individuals Selling Their Home

8/27/2013

 
If you’re selling your main home this summer or sometime this year, the IRS has some helpful tips for you.  Even if you make a profit from the sale of your home, you may not have to report it as income.

Here are 10 tips from the IRS to keep in mind when selling your home.

1.  If you sell your home at a gain, you may be able to exclude part or all of the profit from your income.  This rule generally applies if you’ve owned and used the property as your main home for at least two out of the five years before the date of sale.

2.  You normally can exclude up to $250,000 of the gain from your income ($500,000 on a joint return).  This excluded gain is also not subject to the new Net Investment Income Tax, which is effective in 2013.

3.  If you can exclude all of the gain, you probably don’t need to report the sale of your home on your tax return.

4.  If you can’t exclude all of the gain, or you choose not to exclude it, you’ll need to report the sale of your home on your tax return.  You’ll also have to report the sale if you received a Form 1099-S, Proceeds From Real Estate Transactions.

5.  Use the worksheets in Publication 523, Selling Your Home, to figure the gain (or loss) on the sale.  The booklet also will help you determine how much of the gain you can exclude.

6.  Generally, you can exclude a gain from the sale of only one main home per two-year period.
 
7.  If you have more than one home, you can exclude a gain only from the sale of your main home.  You must pay tax on the gain from selling any other home.  If you have two homes and live in both of them, your main home is usually the one you live in most of the time.

8.  Special rules may apply when you sell a home for which you received the first-time homebuyer credit.  See Publication 523 for details.

9.  You cannot deduct a loss from the sale of your main home.

10.  When you sell your home and move, be sure to update your address with the IRS and the U.S. Postal Service. File Form 8822, Change of Address, to notify the IRS.

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  • Home
  • About
    • Book An Appointment
  • Accounting
    • Dashboard
    • Xero+Accountency
    • Xero Intro
    • AutoMagical Accounting
    • QuickBooks >
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    • Dashboard
    • Individuals
    • Businesses
    • Tax Stuff >
      • Individuals >
        • Income >
          • Debt Forgiveness
          • Foreign Income
          • Gambling Income
          • Unemployment
          • Other Income
        • Deductions & Credits >
          • Adoption
          • Charitable Contributions
          • Earned Income Tax Credit
          • Educational Expenses
          • Energy Tax Credits
          • Employee Business Expenses
          • Other Deductions and Credits
        • Affordable Care Act - Individuals
        • Children and Dependents
        • Death
        • Disabled Taxpayers
        • Educators
        • Health Care
        • Identify Theft
        • Marriage and Divorce
        • Military
        • Real Estate
        • Retirement Savings
        • Seniors
        • State Taxes
        • Record Keeping
        • Who Must File
        • Other Topics
      • Businesses >
        • Affordable Care Act - Businesses
        • Year-end Reporting Obligations >
          • 1099's
          • Health Insurance Premiums
          • Depreciation
          • Reimbursed Employee Business Expenses
          • Company Automobiles
        • Employment Tax Credits
        • Independent Contractors
        • Tax Credits and Deductions for Businesses
        • Other Business Topics
        • Required Business Posters
      • Amended Returns
      • IRS Notices and Problems
      • Tax Plan >
        • All About the Earned Income Tax Credit
        • 5 IRS Audit Red Flags
        • Retirement Plans for Sole Proprietors
        • Are You Claiming All of Your Tax-Deductable Business Expenses for 2015?
        • All About Past Due Tax Returns
        • Do You Need to File Form 1099s?
        • How to File an Appeal with the IRS
        • Why You Might Get a Letter from the IRS, and What to Do
        • How to File an Amended Tax Return
        • Should You Claim the Home Office Deduction?
        • How to Avoid -- And Deal with -- Identify Theft
        • Q & A: IRS Audits
        • Are You Using the Right Business Structure?
        • Starting Planning for 2015 Income Taxes Now: 5 Tips
        • What You Need to Know About Estimated Taxes
        • Contractor or Employee? How the Income Tax Obligations Differ
        • The New Form 1095-A: Reporting Health Insurance Coverage
        • Are Your Social Security Payments Taxable?
        • Do You Qualify for the Earned Income Tax Credit?
        • Are You Eligible for Health Insurance Tax Credits
        • Employee Retirement Plans - Tax Advantages and Other Benefits
        • 5 Business Tax Credits You May Be Missing
        • New Business in 2012
        • Is it a Bad Debt or a Simple Revenue Loss? Telling the Difference
        • Business Taxes Add Complexity: How Will This Affect You?
      • Tax Scams