Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.
Wednesday, February 23, 2011
We're selling our house. What taxes do we owe?
Taxpayers can exclude gains from the sale of your personal residence up to $250,000 ($500,000 married filing jointly) if all the following are true:
You meet the ownership test – owned the home for at least 2 years
You meet the use test - lived in the home as your main home for at least 2 years
During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home.
Report the gain from the sale on line 8 of Schedule D (use Form 1099-S if you received one). Then on line 9 of Schedule D, write "Section 121 exclusion" in column (a) of that line and show the amount of the exclusion in column (f) as a loss in parentheses.
For more information please see IRS Publication 523, Selling Your Home (.pdf).
Financial Services professional with a background in Banking, Marketing & Communications, Internet, Income Taxes, and Retirement Plans. In addition, a sports radio broadcaster and adult softball umpire.
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