Be Aware of Many Tax-Related Issues if You Sold Your Home Last Year

Read About Home Sales and the Home-Sale Gain Exclusion

If you sold your home last year, or if you are thinking about selling it, you should be aware of the many tax-related issues that could apply to that sale so that you will be prepared at tax time and not have to deal with unpleasant surprises.  This article covers home sales and the home-sale gain exclusion, particularly when that gain exclusion applies and what portion of it applies.  Certain special issues always affect home sales, such as the use of a portion of the home as an office or daycare center, previously use of the property as a rental, and acquisition in a tax-deferred exchange.  Other frequently encountered issues are related to the “2 years out of 5” rules for ownership and use, as these rules must be followed to qualify for gain exclusion. (more…)