With over 45 years in the Central Ohio area
"We Know The Real Estate Market"
When buying and selling real estate it is to your advantage that you work with both experienced realtors and those who know the local real estate market. It is to your advantage that you work with The Selling Columbus Team. Contact us today and find out what all we can do for you!
When you sell a stock, you owe taxes on your gain, the difference between what you paid for the stock and what you sold it for. The same is true with selling a home (or a second home), but there are some special considerations. What you paid for the home includes not only the original price, but also the cost of many improvements, so hold on to your receipts!What receipts to keep? | Calculate capital gains - the basics
Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:
Also note that as of 2003, you may also qualify for this exemption if you meet what the IRS calls "unforeseen circumstances" such as job loss, divorce, or family medical emergency.
* This may not apply if you are a member of the uniformed services or Foreign Service.
In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate this, the basics are:
1. Take the purchase price of the home: This is what the home sold for, not the amount of money you actually contributed at closing.
2. To the purchase price, add the following things which also cost you:
3. The total you get from above is the "adjusted cost basis" of your home.
4. Subtract this adjusted cost basis from the amount you sell your home for. That will be your capital gain.
For details see IRS Publication 523.
The partial list below is from IRS Publication 523. Some of the items may surprise you:
I recommend that you get a copy of IRS Publication 523 and read through it. After all, it is your money!
Realty Resource Radio is where we:
It pays to work with an experienced Realtor. If your Realtor let you sell a house after you lived there less than two years, I hope they brought capital gains to your attention. Otherwise, you could be paying tax* on $10,000 or more easily, and it could have been avoided.
If you are making money when you sell your principal residence, do not sell before 2 years if you can avoid it.
*Always consult a tax professional regarding your specific situation.
Greg provides insight and experiences regarding the 2015 real estate market on The Joel Riley Show, News Radio 610 WTVN
Listen to the MP3.