Tax Implications Of Selling Your Home
Most sellers make a profit when they sell their homes. They often have questions about how capital gains tax will impact them.If you are selling your primary residence, you do not have to worry about paying taxes on your profits if your gain does not exceed $250,000 as a single taxpayer (or $500,000 as a married couple filing jointly). This tax law comes from The Taxpayer Relief Act passed in August of 1997.
Different rules apply when you sell income property. If you sell one property then purchase another, the taxes will be due for the year the sale occurred. On the other hand, if you arrange to exchange one investment property for another, you can defer the capital gains tax.
To ensure complete tax deferment you must acquire a replacement property which is equal or greater in price than your exchange property, and move all of your equity from the old property into the new. It is not as complicated as it sounds, but you do need professional help. If you would like more information on selling your home or 1031 exchanges, visit my website or give me a call. I'm here to help!