Congratulations on selling your house! Now it’s tax season, though, and as you try to decipher the numerous forms from the IRS, there are a number of questions you have to ask yourself:
While this can be a very complex issue, we’ll lay out the basic principles, as well as some important things you need to know, regarding taxes once you sell your house.
Turbotax presents all this information very clearly, but here are the straightforward tax facts about selling your house:
The three major points to take away 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.
Not all moving cases are cookie cutter, and the IRS knows that. There are a number of qualifications 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 seemed 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.
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, but when you find the team to work with, the process should be smooth and made easier for you, the homeowner, because the goal of any successful real estate transaction is for both the buyer and the seller to leave satisfied.
At SetSchedule, our experts are ready to help. Our realtors are familiar with the entire process of selling houses from beginning to end, and will be able to sort out the tax details in order to make the process less stressful for you. With their advanced technology, SetSchedule is revolutionizing the process of selling homes fast. Working with their team will guarantee you a smooth transition to wherever your next move takes you.