What can you deduct for taxes

what can you deduct for taxes

Answers

Best Answer: Assuming the home was used exclusively for personal use. meaning you did not rent any of it out or use any of it for a home office or for other business purposes and take depreciation on your taxes. then the only "deduction" you get in the year of sale would be the same things you would get if you didn't sell the home. I'm talking Real Estate taxes you paid as well as any mortgage interest. Unlike buying a home when you get to deduct points, there is nothing special you can deduct when you sell. All the other answers who are mentioning things like improvements and realtor fees are assuming you are selling the home for a profit. If you lived in and owned the home for more than 2 years, then it is unlikely that you are selling the home for more than a profit of $250,000 ($500,000 if married). Therefore, you needn't worry about increasing your basis

by adding in realtor fees and such. You see, since your home is personal property according to the IRS, you can not take a loss on the sale. If you bought for $200,000 and sold for $150,000, you eat that loss. However, if you sell for a gain. if you bought for $150,000 and sold for $200,000, the IRS is going to want in on that profit. However, the IRS has a clause whereby if you sell the home for a profit of $250,000 or less ($500,000 or less if you are married), and you owned and lived in the home for at least 2 years, then you don't have pay any taxes on the sale to the IRS. If not, the sale may increase your tax liability.

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Source: answers.yahoo.com

Category: Taxes

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