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Getting ready to sell your home? Here are the key tax facts you should know

Tue, Feb 21, 2012 at 10:29AM

Getting ready to sell your home? Here are the key tax facts to keep in mind when figuring your gains or losses on the sale of your home: When you have financial gain from the sale of your home...you may be able to exclude up to $250,000 (if a single filer) or $500,000 (if filing a joint return). In order to do so, you must have lived in the house as your primary residence for 2 of the last 5 years. The 2 years do not have to have been consecutive. You cannot deduct a loss from the sale of your home. However...under new rules if you short sale your home you may not have to pay taxes on the lower sale price or forgiven loan amount. Normally, mortgage debt owed to a financial institution that is canceled or forgiven is taxable. However, under the Mortgage Forgiveness Debt Relief Act of 2007....taxpayers generally can exclude income from the discharge of debt on their principal residence or mortgage restructuring. As with most tax deductions and credits, partial criteria also apply. Exceptions are allowed if you sold your house because the location of your job changed, because of health concerns, or for some other unforeseen circumstance (e.g. natural disasters) prior to having lived in the home 2 years. You calculate your partial exclusion based on the amount of time you actually lived in your home. Regarding this or any tax related matter...you should still consult with your accountant. For more information please contact Neal The Real Deal Bloom-Realtor® /Keller Williams Properties Weston Realtor(R) Neal Bloom-copyright 2007 1625 N. Commerce Parkway,Suite 105 Weston FL 33326 (954)608-5556 The Real Deal tells it Like it is in Real Estate-copyright © 2010-All rights reserved Page copy protected against web site content infringement by Copyscape


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