HOME SALEIf you owned and lived in your home for two of the last five years before the sale, then up to $250,000 of profit may be exempt from federal income taxes. If you are married and file a joint return, then it doubles to $500,000.¹ To qualify for this exemption, you cannot have excluded the gain on the sale of another home within two years to this sale. Please consult a professional with tax expertise regarding your individual situation.² This profit would be excluded from your taxable income. In fact, the sale may not need to be reported unless you receive a Form 1099-S or do not meet the above requirements. If you sold your home at a loss, unfortunately, you can’t deduct the loss.
THERE ARE EXCEPTIONSEven if you do not meet the above requirements, you may qualify for this exclusion:
- If you receive the house in a divorce settlement,
- Where you are able to count short-term absences as time lived in the house
- When a surviving spouse who has not remarried can count the time that the deceased spouse lived in the house.
- IRS.gov, 2016
- The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2016 FMG Suite.