Did You or Will You Sell Your Home This Year? Here are Some IRS Tax Tips!

0 votes

October 31, 2011

If you have sold your home this year or are still about to sell it before the end of the year, the IRS has put together a great list of 10 tax tips to help you manage through tax season.

1. You are eligible to exclude the financial gain from your income if you have used your home as your main residence for 2 years out of the 5 years prior to the date of its sale.

2. If you have gained from the sale of your home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

3. You are not eligible for this exclusion if you excluded the gain from selling another home during the 2-year period prior to the sale of your home.

4. If you can exclude all of the gain, you do not need to report the sale on your tax return at all.

5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.

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

7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.

8. 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 ordinarily the one you live in most of the time.

9. If you received the first-time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year’s tax return.

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

For more information about selling your home, see IRS Publication 523, Selling Your Home. This publication is available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

There is a lot of free information available about buying, selling or investing in Holladay and Salt Lake City, Utah real estate. For complete information about the Salt Lake City real estate market including foreclosures, short sales and more, visit the website dedicated to everything Salt Lake City Utah real estate.

For a FREE Weekly List of Foreclosed Homes with 4-5 Bedrooms in Salt Lake City, UT under $150,000 fill in the form below and you will receive home listings as they hit the market. You will get all the hot listings as they come up even before most agents see them!

Just fill in the form below with your correct name and e-mail address and we will set it up to have the list automatically e-mailed to you. Just add it in the comments if you have an interest in Short Sales and HUD homes too!

If you or someone you know are in need of a competent and caring real estate professional in or near Salt Lake City, Utah, I will be happy to help, just call me at 801-518-4599.