Congratulations on selling your house! Now it’s tax season, though, and as you try to identify which of the numerous available forms you need to submit to the IRS, there are a number of questions you have to ask yourself:
While taxes on selling a house can be a very complex issue, we’ll lay out the basic principles so you have a foundation to start from. We'll also include some important things you need to know, regarding taxes on selling a house.
Turbotax presents all this information very clearly, but here are the straightforward facts to answer the question “Do you pay taxes when you sell a house?"
The three major points to take away from the above facts regarding taxes on selling a house are that you need to have owned the house for at least two full years, the home you are selling is your primary residence, and you have not received but excluded a gain on another home in the last two years.
Forbes Magazine helps make sure you know what you can and can’t claim on your taxes when you’re getting ready to move:
It also doesn't matter if you sell your house in the best month of the market, or the worst month of the market; your tax rates will depend on the value of the house, and not on the time of the sale. It is important to understand this when you are considering the taxes on selling a home.
Not all moving cases are cookie cutter, and the IRS knows that. This makes answering the question “Do you pay taxes when you sell a house?” that much more complicated. There are a number of criteria that may make you eligible for different benefits.
If you are divorced, widowed, have had short term absences during your period of residence, or are a member of the military, intelligence, or foreign services, there are different requirements and classifications. It is therefore best to check with your realtor or accountant when you file taxes on selling your home. The requirements for capital gains reporting, as well, can seem very muddled, as there are many different categories that determine whether you must report your capital gains on your next tax return. This is a critical issue on which you should consult with a real estate tax professional before filing your tax returns in the following year. A real estate tax professional can help you fully and thoroughly answer your questions regarding taxes when selling a house. When it comes to filing taxes, according to TaxAct, be prepared to be presented with the form 1099-S, usually handed out by real estate industry professionals. You will need to fill that out to report the sale of your home, even if you do not need to pay taxes on the gain. You will also need to fill out Form 8822, to register your change of address with the IRS.
There are a lot of complicated tax issues when it comes to selling your house. In your home selling process, you should make sure to find a qualified team to work with that will make the process smooth and easy for you as the homeowner, because the goal of any successful real estate transaction is for both the buyer and the seller to leave satisfied. Now, working with a local agent is the best way to get a grasp of your situation - by submitting a quick form on SetValue you can get connected with the most responsive and knowledgeable real estate professional in your area of interest. They'll be familiar with the entire process of selling houses from beginning to end, and they will sort out the tax details in order to make the process less stressful for you. SetValue is revolutionizing the process of selling homes fast. Working with us guarantees you a smooth transition to wherever your next move takes you.
Message has been sent!