Selling your home? Find out what you need to know about taxes

Income tax Services If you're selling your home, there are a few things you need to know about federal taxes. If you make a profit on the sale of your home, you may need to report the profit as a capital gain when you file your taxes. However, if you owned and lived in the home as your main home for at least 2 out of the past 5 years, you may be able to exclude up to $250,000 of the gain ($500,000 for married couples filing jointly). If you are eligible to exclude the gain, you don’t need to report the sale on your tax return unless you receive a Form 1099-S, Proceeds from Real Estate Transactions. 

Here are some other points to remember:

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

·         Special rules may apply when you sell a home for which you received the first time homebuyer credit. See Publication 523, Selling Your Home, for details.

·         If the home was used for business or rental purposes, special rules apply.

·         When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.

For more information contact us today for no obligation fee consultation.

ABA Tax Accounting

Amare Berhie, Tax Advisor

amare@abataxaccounting.com

612-282-3200

866-936-0430 Toll Free

www.abataxaccounting.com

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