Did you sell your home in 2019? Did you know that you can exclude up to $250,000 for an individual or $500,000 for a married couple from your taxable income when you sell your home? The profit you created by selling your property may be yours, tax free, as long as you meet the requirements.
To exclude the full portion of the money you make from the sale of your home, you will need to have lived in your house as a primary residence for at least 24 months in the 5 years previous to the sale date of the property. You do not need to have lived there at the tine of sale and you do not need to have lived there for 2 consecutive years. This is considered the 2 in 5 rule.
If you do not meet the minimum occupancy requirement you still may be able to exclude a portion of your gains if you are selling your house because of circumstances related to your health or to your job. I STRONGLY RECOMMEND you speak with your accountant or a certified tax specialist to understand the full impact the sale of your home and your tax liability.
If this property was a real estate investment, your profits will be considered taxable income and will be subject to state, federal and self-employment taxes. You may be able to defer the taxes if you completed a 1031 Exchange and used the profits to purchase other property. Again, speak with your accountant or a certified tax specialist to understand the full impact the sale on your tax liability.
Feel free to contact me anytime with questions you may have about the market value of your home.