Tax Tips for Home Sellers
It’s the time of year where everyone is looking for more tax deductions. Homeowners have a healthy list of them to utilize. Mortgage interest, property tax, home office, and refinance (points) deductions are basics that everyone should be including. But if you’ve sold a home in the past year there are even more deductions available.
Home Sale Exclusion – Individuals can exclude up to $250,000 in profit from the sale of their primary residence ($500,000 for married couples filing jointly). Sellers must have owned (and lived in) the home for at least two of the last five years before the sale. Reduced exclusions are generally available for those having to sell their home (owned less than five years) due to change of employment, health, or divorce.
Selling Costs – This includes title insurance, inspection fees, marketing, administrative costs, and broker’s commissions.
Repairs – Generally incidental and necessary repairs aren’t deductible. But any repairs made (within 90 days of sale) to make the home more saleable can also be considered for deductions. Any major repairs or renovations (outside of the 90 days) that significantly increase the home’s value may also be eligible for deductions.
Moving Expenses – Sellers moving more than 50 miles for a new (full-time) job may also deduct moving costs, including transportation expenses, lodging, and storage.