• Over $1 Billion SOLD in California - Our Active Listings = $109,114,000+

Selling & Capital Gains

The Taxpayer Relief Act of 1997 changed the tax laws concerning capital gains on primary residences, and is still in effect. You only pay taxes on any gains over $250,000 ($500,000, if filing jointly) when you sell your primary residence.

Other rules apply, but briefly, this is how the IRS recommends figuring the gain (or loss) on the sale of your primary home:

  1. Subtract your expenses from the selling price to obtain the realized amount. Expenses typically include commissions, advertising fees, legal fees, and loan charges, such as points.
  2. Subtract the adjusted basis (the amount you paid to buy or build it) you made to the basis of your home from the realized amount to get the gain or loss.

According to the Internal Revenue Service (IRS), you do not have to report the sale of your home on your tax return unless:

  • You have a gain and you do not qualify to exclude all of it, or
  • You have a gain and choose not to exclude it.

Otherwise, you must report the gain on Form 1040, Schedule D.

As with any tax information, your personal situation (including such things as divorce) can have major tax implications. And since IRS tax rules change often, you’ll want to be sure to consult with a qualified tax specialist.
[tagline_box title=”The Local Realty™ has Associates across the world!” description=”To Find An Associate Call 866.538.6057 or Search, Rate and Review our Associates & Partners on LocalRealtors.com!”][/tagline_box]

img

The Local Realty

The Local Realty is the leading International Lifestyle Real Estate Brokerage specializing in Local Real Estate Services. All of our Real Estate Associates specialize in a specific Community or Property type in order to provide the highest level of service and Local Real Estate Market expertise to our clientele.

Related posts

Your Properties Exterior

Preparing Your Property For Sale: The Exterior Never underestimate the importance of curb appeal....

Continue reading
by The Local Realty

Your Homes Value

Pricing Your Home to Sell The selling price of your home is best determined by current market...

Continue reading
by The Local Realty

Six Critical Elements

The Six Essential Elements to Selling a Home While we'll handle the details of selling your home,...

Continue reading
by The Local Realty