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:

Mike Croxall: Simple Steps To Financing Your First Home

As the Chattanooga area continues to enjoy a growing economy and steady rise in consumer confidence, many first-time home buyers – including millennials – are gearing up to become home owners. Yet, the abundant amount of paperwork involved in the home financing process can intimidate even the most eager of prospective home buyers. Fortunately, with advanced preparation and a ... (click for more)

Real Estate Transfers For Feb. 16-22

NOTICE: The Hamilton County Register’s Office did not publish this data. All information in the Register’s Office is public information as set out in T.C.A. 10-7-503. For questions regarding this report, please call Chattanoogan.com at 423 266-2325. GI numbers, listed when street addresses are not available, refer to the location of transactions (book number and page number) ... (click for more)

2 Homes Totally Destroyed By Fire On Sunday In Separate Blazes

Two homes were totally destroyed by fire in separate blazes on Sunday afternoon. At  5 p.m. , a neighbor called 911 reporting a house fire at 3910 Fairmont Pike on Signal Mountain. Walden's Ridge Emergency Services responded and arrived on the scene reporting a fully involved house fire. A mutual aid response was requested for additional manpower and apparatus ... (click for more)

Signal School Study Says Under Own School System Much More Could Go To The Classroom; Lennon Says Getting Land, Buildings A Major Issue

A panel studying a new school system operated by Signal Mountain concluded that much more money could go directly into the classroom, helping students further increase their potential.   However, County School Board member Kathy Lennon said how the town would be able to acquire the land and buildings is a major issue.   A group of Signal Mountain residents ... (click for more)

Embrace America

Okay, Hollywierd we get it. The world of entertainment and cinema arts do not support President Trump. But for all their derisive and divisive speech, truth remains. People who support conservative values do not hate children, we do not hate immigrants, we do not hate other races and ethnicities although that is all you trumpet at every opportunity.  What we do support ... (click for more)

Roy Exum: The Eye Of The Storm

There is a very serious building in Norman, Okla., that houses the nation’s Storm Prediction Center for the National Oceanic and Atmospheric Administration and the National Weather Service. According to a Four-Day Forecast released on Sunday, north Alabama and the Chattanooga area are in the middle of the bulls eye for the United States. Yes, it was about 40 degrees and sunny ... (click for more)