6 Tax Facts from the IRS
Most home owners are well aware of the tax advantages of home ownership. But, make sure you know the rules before selling your home. Here are 6 facts published by the IRS you should keep in mind:
- If you’ve owned and lived in your home for two of the five years prior to selling it, you can generally exclude up to $250,000 of capital gains ($500,000 on a joint return in most cases).
- You are not eligible for this exclusion if you sold another principal residence within the past two years and excluded the allowable gain from your income.
- If you can exclude ALL of the gain from the sale of your primary residence, you don’t need to report the sale on your tax return.
- If you have a gain on your principal residence that exceeds the allowable deduction, it is taxable.
- You can’t deduct a loss from the sale of your primary residence.
- Special rules may apply when you sell a home for which you’ve received the first-time home buyer credit. (See IRS publication 523, “Selling Your Home,” for details.)
Can a Property Taxe Base Transfer Help You?
If you are interested in selling your current home and buying another one, you should explore if you can take advantage of a Property Tax Base Transfer (especially if you are 55 years or age or older or if you are permanently disabled) The property tax base transfer is an option where by your County may allow you to sell your home and then purchase another home (subject to purchase price limits and limited to the homes being located in participating Counties) and transfer your existing property tax base. This could be a significant savings you can take advantage of.
Is now the right time for you to sell? Property values in Castro Valley are on the rise. Take a look at our latest Neighborhood Sales Report for more information.
Feel free to contact us today. We would be happy to explore your options and answer any questions for you.
