Buy Low, Sell High!

Are you in the process of selling your home? Well, if you are one of the lucky ones that will be facing a gain from the sale of your main home, then there may be an opportunity to exclude some or all of that gain from your income.

• Typically you are eligible to exclude some or all of the gain if your home has been your main home for at least two out of the last five years


• The exclusion caps out at a $250,000 gain ($500,000 for a joint return)


• Any gain that is not eligible for exclusion is taxable. This is reported on Schedule D of your 1040 (individual tax return)


• Losses from the sale of your home are not deductible


• Exclusion is not available if you excluded gain from the sale of another home in the last two years


• Have more than one home? Only your main home is eligible for the exclusion

Remember the first-time homebuyer credit? Those that took advantage of that must live in the home as a primary residence for three years. If you convert this to a rental or non-primary residence less than three years from purchase, you will have to pay the credit back. So before you put your home on the market, or put a rental ad in the paper, be sure that you have owned the home for at least three years to avoid repayment.

Check out this publication from the IRS on Selling Your Home: http://http://www.irs.gov/publications/p523/ar01.html

brad@mcarthurco.com

704.544.8429