Tax Tips for Selling a Residence

Dated: April 9 2024

Views: 38

HOME SELLERS, TAXES, SELLING A HOME

Tax Tips for Selling a Residence

According to the Internal Revenue Service, the primary residence you sold in 2023 may have federal tax benefits that can help you avoid capital gains on the sale, if you meet certain criteria for ownership and use of the home.

To claim a tax exclusion, you must have owned the home for at least two years and lived in the home for at least two out of no more than five years of ownership. The tax gain exclusion that’s available is $250,000 if you’re single, or $500,000 if you’re married and use a joint tax return. If you sell at a loss, such as a short sale, you can’t deduct the loss from your income, likely because of the many homeownership benefits subsidized by the government, including loan programs, first-time and low-income homebuyer grants, energy star appliance credits, and so on. Tax exclusions are also subsidized by the government.

To maximize your gain and lessen your tax bill, you can adjust the basis of the home you sold. The basis is the price you paid for the home, including closing costs and settlement fees. The adjusted basis, explains Smart Asset, factors in capital improvements that you made to the home, such as replacing the roof or the HVAC, adding a second story, or laying utility lines to the home. You can also adjust for casualty losses, like restoring your home after a fire or water damage.

The higher your adjusted basis is, the lower your capital gains are.

Blog author image

Michelle Porter

As a lifelong resident of Greensboro and a leading Realtor since 1994, I've recently expanded my expertise to the Pinehurst area, consistently topping the charts in our market. My roots in Greensboro ....

Latest Blog Posts

Pinehurst Weekend Guide

Your Local Weekend GuideIf you're looking for fun, entertaining, and educational things to do in the Pinehurst, NC area, you've come to the right place. Our Weekend Guide, and sometimes:

Read More

April 2024 Market Snapshot for the Triad

Embark on an exciting journey through the current state of the Piedmont Triad real estate market with our comprehensive monthly market trends update.Arm yourself with the power of knowledge as we

Read More

Triad Weekend Guide

Your Local Weekend GuideIf you're looking for fun, entertaining, and educational things to do in the Greensboro, NC area, you've come to the right place. Our Weekend Guide, and sometimes:-),&

Read More

Should You Tap into Your Home Equity?

HOMEOWNERS, FINANCE, HOME IMPROVEMENTShould You Tap into Your Home Equity?When you put 20% down on a home using a mortgage loan, you own 20% and the lender owns 80%. As you make payments, most of

Read More