Did You Know Every Home Owner Can Save $250K in Taxes When Selling? Discover Capital Gains Exclusions.
Home owners who have lived in their residence for two of the past five years each qualify for a “capital gains exclusion” of $250,000 when they sell. If your home has appreciated in value since it was purchased, you may be able to dramatically decrease or eliminate your capital gains taxes.
The tax code recognizes the importance of home ownership by providing certain tax breaks when you sell your home. To qualify for these breaks, you must meet certain requirements.
The type of home involved is less important. A single-family home, condominium, and cooperative apartment are all be considered a residence.
Your sale qualifies for exclusion of $250,000 gain ($500,000 if married filing jointly) if the following is true:
- You owned the home and used it as your main home during at least 2 of the last 5 years before the date of sale.
- You did not acquire the home through a like-kind exchange (also known as a 1031 exchange), during the past 5 years.
- You did not claim any exclusion for the sale of a home that occurred during a 2-year period ending on the date of the sale of the home, the gain from which you now want to exclude.
If you own or live in more than one home, you may only use the exclusion on your “main home”. Determining which of your homes is considered the “main home” depends on several factors including where you spend most of your time, where you work, and where your family lives.
Lower Your Taxes by $500k
Learn how to sell your home and save up to $250K in capital gains taxes for each property owner.