Monday, July 21, 2014

IRS Summertime Tax Tip 2014-08: Top Ten Tax Facts if You Sell Your Home

IRS Summertime Tax Tip 2014-08: Top Ten Tax Facts if You Sell Your Home

Remember, that if your tax situation is complicated, it is advisable to get professional taxpayer assistance. Make sure the person doing your tax return is certified, and is in good standing. Unfortunately the tax payer is responsible for his / her tax return, even if the person doing it, erred. 

Getting ready to sell your home, or have you already done so in tax year 2014? The following are some tips that you may want to know come tax time.
  • Capital Gains Taxes - A capital gain happens when a taxpayer sells something for more than they paid for it. 
    1. Exceptions to Capital Gains Taxes on the Sale of the taxpayers Primary residence:
        a. Must have used as primary residence at least 2 out of the 5 years before the sale.

        b. The gain of $250,000.00 or less can be excluded for tax purposes. ($500,000) for MFJ [Married 

Filing Jointly] returns. 

The $250G/$500G is not the Sale Price, but the Gain gotten over and above the original purchase price.

Publication 523, from the I.R.S. gives the special qualifications and rules for those selling their homes. Included are special rules for some persons with Disabilities and Service Persons.

"Selling Your Home" - YouTube - IRS Videos

Many may not realize the I.R.S. has information in multiple languages: In Espanol:

"Venta de Su Casa" - YouTube - IRS Videos


ASL: Selling Your Home (Captions & Audio) - YouTube - IRS Videos

Having said all of that, more good news, if your Gain is Not Taxable, you may not be required to report the sale to the I.R.S.

Other news: If the taxpayer decides not to take the exemption, or if any part of the sale is a gain, they may be required to claim it on their taxes. Here is a link to "Questions and Answers on the Net Investment Income Tax."
  • First Time Homebuyer Credit - Exception(s): There may be special rules regarding the sale of that home. Check Publication 523, to find out what they are.
Important note about the Premium Tax Credit. If you receive advance payment of the Premium Tax Credit in 2014 it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.
Reporting Changes To The Marketplace As They Happen: Pub 5152: English
Reporting Changes To The Marketplace As They Happen: Pub 5152: Spanish 

Selling Your Home - Podcast: English
Selling Your Home - Podcast: Spanish

Premium Tax Credit - Podcast: English
Premium Tax Credit - Podcast: Spanish