It’s tax season! Okay, we realize taxes are not a fun topic, however, we still wanted to give you a few helpful tips about your taxes for when you sell your property. We have a short and simple list of deductions and exclusions courtesy of Realtor.com.
Since we are in a seller’s market, and it is tax season, we wanted to make sure we talk about the tax advantages of selling. Please be sure to consult a tax professional.
The first deduction we want to talk about is selling costs. You can deduct selling costs as long as the costs are directly applicable to the selling of your house. Keep in mind that this applies to your own home and not an investment property and you will need to have lived in the home for at least 2 years during the 5-year time period before the sale occurred.
According to Joshua Zimmelman, president of Westwood Tax and Consulting in Rockville center, NY, “You can deduct any costs associated with selling the home – including legal fees, escrow fees, advertising costs, and real estate agent commissions.”
Thomas J. Williams, a tax accountant from Kissimmee, FL states that the costs can also include any home staging fees.
Another deduction is home improvement and repairs, as long as you were within the right timeframe. “If you need to make home improvements in order to sell your home, you can deduct those expenses as selling costs as long as they were made within 90 days of the closing,” states Joshua Zimmelman.
If you own a home, you already know all about property taxes and likely have been paying them every year. You can deduct what you paid last year in property taxes, up to a maximum of $10,000.
There are 2 more options, one is the mortgage interest deduction and the other is a capital gains for sellers exclusion. These two are a little tricker and complicated so we will leave it to your capable tax professional to explain them to you. As always, we ask you to consult a tax professional. Obviously, you can always come to us at Amin Vali Real Estate Investment for any questions and concerns and if we are not able to help you, we will do everything we can to get you in touch with the best professionals around.