Taxes on Selling Your House? Here’s a Plain-English Breakdown
Figuring out taxes on selling a house can be tricky. Use our five-part guide to understand tax breaks and maximize earnings.
Owning a house (or two, or three) is an exciting milestone in life and a quintessential symbol of the American Dream. But selling a house can be particularly daunting, especially when you account for the numerous and vexing tax implications involved.
Step one: Talk to an expert!
Selling your house soon? Connect with a top agent near you to get an expert opinion on how much your house will sell for, what to fix before listing, and the latest local housing market trends.
As if the process of selling a house wasn’t complicated enough, lo and behold, Uncle Sam decides to play a mean numerical trick on you when that dreaded tax season rolls around.
After all, the last thing you want after popping the bubbly in celebration of your big home sale is a surprise letter from the Internal Revenue Service (IRS). Or worse yet, finding out after the chips fall that you missed out on big breaks.
Not to worry; we’re here to help you understand the rules, regulations, and stipulations so you can feel more confident about the taxes you owe — or (better yet) don’t owe.
Editor’s note: This blog post is meant to be used for educational purposes only, not legal or tax advice. If you need help determining the taxes on your home sale, please consult a skilled tax professional.
Understanding the capital gains tax break
Before we get into the nitty-gritty, know that in most cases, when you sell your home, you won’t even need to report the sale to the IRS. That’s because there’s a good chance the profit from your home sale is tax-free.
