Are you looking to selling a house?
All seller should be always aware about all taxes involving the sell of a house, they’re a lot of documentation and planning going on. Some examples are like the Form 1099-S, “Proceeds From Real Estate Transactions.” A seller will receive this form if the gain on the sale of the home is not entirely excluded from income.
The gain from your home can be tax-free up to $250,000 if single or $500,000 if married. For more information about this exclusion and requirements to claim the exclusion, IRS Publication 523 “Selling Your Home” is a great place to start your research.
We need to keep in mind: always keep your receipts! Since certain closing costs and home improvements can increase the basis of your home, it is important to keep your receipts to have proof of the increased basis. Increasing basis can reduce taxable income at the time you sell your home or increase the loss on the sale. Certain fees and closing costs that can increase your basis include:
- Survey fees
- Recording fees
- Owner’s title insurance
- Abstract of title fees
Examples of certain improvements that increase basis are:
- Construction of a deck or garage
- Addition of central air conditioning
- Lawn sprinkler system
- New roof or siding
Since there is a lot that goes into selling of a home, you ahould learned with a qualified tax professional so you don’t miss out on any of these potential tax benefits.
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