If you sold your home this year for a profit, it may not be taxable income!
In most cases, if your home has been your primary residence 2 out of the 5 years you’ve owned it, you may not have to report it as income. Usually, you don’t have to report up to $500,000 dollars for joint returns—$250,000 for individuals.
If you received a 1099s, you’ll need to report the sell of your home as income however. But generally, the sell of your primary residence can be excluded.
If your have more than one home and sold a secondary home, you’ll need to report it as taxable income under a Proceeds From Real Estate Transactions, form 1099s.
While purchasing and selling real estate is viewed as investing, selling your primary home is not considered under a new tax law in 2013 called the Net Investment Income Tax.
One thing to consider though is that if you bought a home using the First-time Homebuyer Credit, you are more than likely not eligible for excluding the income from your taxable income.
Unfortunately, if you sold your home at a loss, you’re not able to claim the loss as a deduction.
Selling your home is a significant event; make sure you talk to us about the sell of your home so we can make sure you qualify for every advantage possible as well as making sure you meet all of your legal obligations.
Image courtesy of netan on flickr; reproduced under Creative Commons 2.0