With the mortgage cost cycle appearing to peak and buyers frustrated at the shortage of housing choices currently, sellers are in a prime position to maximize the value of their home if they choose to sell in the next few months.
Tax code changes during the past six years have affected the situation for some homeowners. If you consult a qualified adviser, you’ll be able to understand your own situation and, perhaps, benefit financially.
This list may help you with the questions you should ask your licensed adviser or accountant.
Sale costs
You must have lived in your home for two of the past five years to qualify for possible savings. Fees incurred for legal, marketing and agent commissions can qualify for deductions.
Staging
If you go to the expense of staging your home (renting new furniture to put your home in its best light), you can claim this, too. It’s not a deduction, however. Instead, it may reduce any capital gains tax. It can be used to reduce the reported sale price to the IRS. Ask your adviser for how specific details may benefit your situation.
Upgrades
Cash spent improving your home specifically to sell it can be claimed. However, these expenses only qualify if incurred within 90 days or less of selling your home. Again, seek clarity on your situation from a licensed financial adviser.
Property tax
If you’re up to date with your taxes with the IRS, you can back-claim for the period of the tax year you’re not the owner.
Capital gain
If you’re a couple, you can make a $500,000 profit on your property before facing a capital gains tax. Singles have a $250,000 limit. Specific conditions relate to this tax. A licensed professional can advise you on the details.
NOTE: The information in this article is general in nature and provided as an overview only. Always consult your financial advisor or accountant for advice specific to your personal circumstances.