When it’s time to sell your home, there are a myriad of details to take care of – including recognizing the impact the sale of your home will have on your tax responsibilities. Below are ten tax tips from the Internal Revenue Services’ Summertime Tax Tip newsletter. You can find more tax tips on their website at www.irs.gov.
1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.
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.