If you sell your house there are certain benefits that you may get from the Internal Revenue Service (IRS). Here are a few tax tips for consultants and you on how to benefit.
If you have used the home for two out of the last five years, you can exclude 250,000 dollars from your income, the capital gain is tax free. But you may not exclude the gain if you already did so on another house in the last 5 years.
You must report all gains that cannot be excluded under the $250,000 limit. And if there is a loss on the sale of the home, you cannot deduct it. Sorry.
There are worksheets that help you determine whether you made a gain or loss on the sale. These can be found in IRS publication 523, on the IRS.gov website.
Having more than one house limits you to excluding gains from the sale of your main house only. This is the house that you usually spend most of your time in. Vacation homes cannot excluded from capital gains tax.
First time home-buyers are required to repay the credit if they do not use the property as their primary residence for more than 36 months after getting a home-buyer credit. The details should be filed with your tax returns using form 5405 the year you stopped using the house as your primary residence.
Be sure to let the IRS and the United States Postal Service know about any changes in address so that you do not lose correspondence and refunds from them.
The IRS publication for selling your home, 523, can be found on their website www.IRS.gov or call 800-TAX-FORM (800-829-3676) to receive a copy.
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