For married couples selling their primary home and filing jointly, you may exclude up to $500,000 of your capital gain from tax ($250,000 for singles.) To claim the whole exemption, you must have owned and lived in your home, as your principal residence, an aggregate of at least two of the five years before the sale. How do you calculate the capital gain on your sale? Your home’s selling price Minus Deductible Closing Costs (Points, Prepaid Interest and your share of prorated property taxes) Minus your Selling Costs (Real Estate Broker’s Commission, Title Insurance, Legal Fees, Advertising Costs, Escrow Fees and Inspection Fees) Minus your Tax Basis in Property (Purchase Price + Purchase Expenses + Capital Improvements minus Any depreciation, minus any casualty losses or insurance payments) If you don’t meet the requirement, because you haven’t lived in your home a total of two out of the last five years, you may still be eligible for a partial tax break in...
Read More