Tax benefits you can take advantage of when you sell your home.
If you make less than $250,000 and have lived in your home for two of the five years before you sell, the IRS doesn’t want nor need to know about your home sale because your profit is excluded from being taxed. Getting the tax deductions that you deserve requires you itemize you taxes, which may sound like a hassle but is well worth your time and energy. Learn how to get the best tax breaks for your real estate property.
- Selling costs
If you don’t qualify for the 121 exclusion, you’ll owe taxes for any profit. Make sure that you deduct every single selling cost from your gain. The following can be deducted:
- Inspection fees
- Your real estate agent’s commission
- Advertising costs
- Title insurance
- Legal fees
- Advertising costs
- Escrow fees
- Moving deduction
Relocating for work? You may qualify for a deduction because of it. Not all, but a good amount, of your moving expenses can be added to your deduction. They include:
- Travel to your new place
- Storage costs
- Transportation costs
- Lodging costs
- Points
If you refinanced and used mortgage points to lower your interest, you could qualify for an additional deduction. The deduction is proportional to the points you used to pay off your loan—and when you do pay it off, you can use the remaining points to deduct as well.
- Home improvements (not starring Tim Allen)
Sometimes one must improve the home, not for one’s own sake, but to help it sell. Improvements that are made within 90 days of the closing are considered selling costs, which are deductible.
- Property deduction
You can deduct property taxes for the part of the year which you legally owned your home. Everything is fair game until the date of the sale!
Every person has different needs, and for every person there is a solution. Choose the one that’s right for you! For all of your home buying needs throughout the Solana Beach, California area, contact the professionals at Ranch & Coast Mortgage Group Inc.
