
Many people sell their homes for more than they cost in the first place. If you are in this fortunate situation, and your home has appreciated in value, you could be required to pay capital gain taxes — not on the whole sale, but on the profit your home has earned for you over time.
☛ Homes are investments, offering an important path to financial independence. Read more about the appreciation of a home’s value on Deeds.com.
Now, the good news for many homeowners. The IRS allows the seller to exclude a significant amount of a home sale profit from capital gains tax. (Whew!)
This article offers general information on home sales and taxes for the homeowner who is planning to sell. Note that your state may regard some or all of your capital gains as taxable income. In this article, we focus on federal law and policy.
Continue reading “For Home Sellers: Capital Gains Tax 101”