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Local Realtor Tips & Advice

What's Your House Worth? Ask the Right Real Estate Agent
May 8, 2007
When it comes down to buying a home you'll have enough on your mind without having to worry about whether your real estate agent is doing a good job.

Select the Right Agent When Buying or Selling Your Home
April 17, 2007
Purchasing or selling a home is a major step. Choosing the right Realtor can help you make sure your real estate transaction lives up to your expectations.

Picking the Right Agent When Selling Your Home
April 5, 2007
To make your home selling experience a good one, you will need the right Realtor to do the job. How do you choose which realtor is best for you and for selling your home?

Taxes on Your Home Sale: Understanding the Basics

By Sheryl Landrum
Home Worth Columnist

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Our homeowner's tax benefit is one of the nicest perks we have as property owners. Not only do we build equity in a home to house ourselves and our loved ones, but we reap great tax benefits each year as well. But if you are now thinking of selling your home, what do you need to know about the tax repercussions from a home sale profit?

Tax Basics on Your Home Sale Profit

The Tax Relief Act of 1997 and other tax law provisions allow up to $500,000 in tax exclusions for capital gains realized in your home's sale or $250,000 for single homeowners or married couples filing separately. The home must have been your principle residence for two out of five years leading up to the home sale. This exclusion can be used repeatedly as long as there is a two year period between home selling.

If your home selling gains are over the eligible exclusions, you can use the following tax deductions to reduce your home sale profit:
  • The cost of home improvements you have made.
  • The cost of your broker's commission on the sale of your home and/or attorney's fees.
  • Closing costs for title insurance, recording fees, transfer taxes and other closing costs on your home sale.
  • Any lender pre-payment penalties for paying off your home mortgage before its due date.
There are other means to reduce your tax burden. Creating an installment sale in your house's sale can defer your taxes and gains over a period of years, and turning your home into investment property and doing a Section 1031 exchange may also help to defer the tax gain on your home sale. Whatever you do, make sure when you are considering selling your home that you consult with your tax consultant or legal advisor to ensure your tax saving success.

Source
Homesellers Handbook: How to Sell a Home in Today's Market, California Title Company

About the Author
Sheryl Landrum is a Senior Loan Officer with First Capital Mortgage of San Diego at the Prudential Realty Office in Bonsall, California.
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