moonchild
VIP Contributor
When you sell your home, there are a number of tax implications to consider. Depending on your individual circumstances, you may owe capital gains taxes on the profit you make from the sale or even make money from selling your own home.
Capital gains taxes are based on the difference between the selling price of your home and its original purchase price, minus any costs associated with selling the home, it's like the appreciative price of the home, when you buy a house for 100k and sell it for 80k the tax on your house is 20k. If you've owned your home for more than one year, the gains are considered long-term and are taxed at a lower rate than short-term gains, from this simple example you've understand how it works.
there are a number of factors that can affect your capital gains tax liability. For example, if you've made substantial improvements to your home, like you have make some interior design, or fix some toilets or even renovate or revamp some parts of the house, you may be able to deduct those costs from your capital gains calculation. if you're selling your home due to a job relocation or other unforeseen circumstances, you may be able to exclude a portion of the gains from your tax liability so that it will be lower.
It's also important to consider the tax implications of any mortgage debt that you may have. If you sell your home for less than the amount you owe on your mortgage, you may be responsible for paying the difference.
On task like this, it's important to work with a qualified tax professional to determine your individual tax liability when selling your home. With the right planning, you can minimize the amount you will pay that way, but from this article you are able to understand roughly how it works.
Capital gains taxes are based on the difference between the selling price of your home and its original purchase price, minus any costs associated with selling the home, it's like the appreciative price of the home, when you buy a house for 100k and sell it for 80k the tax on your house is 20k. If you've owned your home for more than one year, the gains are considered long-term and are taxed at a lower rate than short-term gains, from this simple example you've understand how it works.
there are a number of factors that can affect your capital gains tax liability. For example, if you've made substantial improvements to your home, like you have make some interior design, or fix some toilets or even renovate or revamp some parts of the house, you may be able to deduct those costs from your capital gains calculation. if you're selling your home due to a job relocation or other unforeseen circumstances, you may be able to exclude a portion of the gains from your tax liability so that it will be lower.
It's also important to consider the tax implications of any mortgage debt that you may have. If you sell your home for less than the amount you owe on your mortgage, you may be responsible for paying the difference.
On task like this, it's important to work with a qualified tax professional to determine your individual tax liability when selling your home. With the right planning, you can minimize the amount you will pay that way, but from this article you are able to understand roughly how it works.
