10 Tax Tips For Individuals Selling Their Home

Wednesday, August 28, 2013
If you are selling your main home this summer or sometime this year, the IRS has some helpful tips for you. Even if you make a profit from the sale of your home, you may not have to report it as income.
 
Here are 10 tips from the IRS to keep in mind when selling your home.
 
  1. If you sell your home at a gain, you may be able to exclude part or all of the profit from your income.
    This rule generally applies if you’ve owned and used the property as your main home for at least two out of the five years before the date of sale.
  2. You normally can exclude up to $250,000 of the gain from your income ($500,000 on a joint return). This excluded gain is also not subject to the new Net Investment Income Tax, which is effective in 2013.
  3. If you can exclude all of the gain, you probably don’t need to report the sale of your home on your tax return.
  4. If you can’t exclude all of the gain, or you choose not to exclude it, you’ll need to report the sale of your home on your tax return. You’ll also have to report the sale if you received a Form 1099-S, Proceeds From Real Estate Transactions.
  5. Use IRS e-file to prepare and file your 2013 tax return next year. E-file software will do most of the work for you. If you prepare a paper return, use the worksheets in Publication 523, Selling Your Home, to figure the gain (or loss) on the sale. The booklet also will help you determine how much of the gain you can exclude.
  6. Generally, you can exclude a gain from the sale of only one main home per two-year period.
  7. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is usually the one you live in most of the time.
  8. Special rules may apply when you sell a home for which you received the first-time homebuyer credit. See Publication 523 for details.
  9. You cannot deduct a loss from the sale of your main home.
  10. When you sell your home and move, be sure to update your address with the IRS and the U.S. Postal Service. File Form 8822, Change of Address, to notify the IRS.
 
For more information on this topic, see Publication 523. It’s available at IRS.gov or by calling 800 TAX-FORM (800 829-3676).

Additional IRS Resources:

Home Prices And Sales Rise In July

Although low supply and tight credit standards are still hurdles to recovery, prices continue to rise in most local areas. Job growth has strengthened lately, but wage growth has not kept pace with the price gains we have seen.   Buoyed by stable and continuously lower interest rates, affordability is still historically high yet below its all-time peak. Rising inventory ... (click for more)

John Shearer: Covering The Derek Dooley House Auction

On Saturday, as part of my freelance journalism work I do, I had an opportunity to cover the scheduled auction of former Tennessee football coach Derek Dooley’s home in West Knoxville. He has, of course, moved on to Dallas with his family as receivers coach of the Cowboys of the NFL, but his large and historic home bought within his first year at Tennessee for more than $2 million ... (click for more)

16-Year-Old Shot Near Emma Wheeler Homes

A 16-year-old was shot near Emma Wheeler Homes on Sunday night. At approximately 7:40 p.m., Chattanooga Police received a call of a person shot from a local hospital. Officers spoke to the victim, a 16-year-old black male, who was transported to a local hospital in a personal vehicle. The victim’s injury is minor and non-life threatening. Investigators spoke to the victim ... (click for more)

Helen Burns Sharp Asks Recovery Of Legal Fees In Successful Black Creek TIF Lawsuit

Helen Burns Sharp, citizen activist who sued to try to stop a $9 million Black Creek Tax Increment Financing (TIF) and won, is seeking to have her legal expenses paid by the city and the developers. Ms. Sharp said in a court filing that her legal bills to attorney John Konvalinka are $74,427 thus far. Chancellor Frank Brown ruled in favor of Ms. Sharp, saying the Sunshine ... (click for more)

Decimating The Chattanooga Public Library

Corinne Hill claims that the library is just undergoing a normal weeding process for eliminating books.  She has bragged that she's responsible for the elimination of over 100,000 books - with more to go. "Normal" weeding is not rampant throwing away.  Yes, books go to the Friends for their sale - where they get $2 for a $75 book and thousands wind up being recycled ... (click for more)

The Many Lessons I Learned From Helen McDonald Exum

Helen McDonald Exum was my friend and mentor. As I think of her passing I can only imagine the celebration that is happening in heaven as the news of her arrival is being told. I am sure that there is a party that not only has she organized but that there is not a detail that has been left to chance. I am sure that it is the grandest of events, for you see, she has been planing ... (click for more)