Sold a home recently? Do not miss these

Jenny Gonzalez

SOLD A HOME RECENTLY? DO NOT MISS THESE TAX DEDUCTIONS

Do you know that there are some tax deduction benefits for you when you sell your home? Well, that’s right, and you should take advantage of them. Unfortunately, not everyone knows about this. Therefore, when they sell their homes, they pay more than the necessary tax required of them. However, if you desire not to take advantage of these tax deductions, you should check out the following rundown to ensure you don’t miss any of them:

SELLING COSTS

This is one of the tax deductions that you’re entitled to. It is a kind of deduction that is applicable to sales associated with properties. More so, for it to be applicable to your case, you must have resided in the home for over two years of the five years that preceded the sale. Another criteria for this is that the house must not be an investment property; instead, it must be a principal residence. If you consider all these criteria and you fit in, then you shouldn’t miss out on the tax deduction that comes with selling cost. So, what cost are we referring to when we talk about the selling cost? They are costs associated with the selling of the home, and they include escrow fees, legal fees, real estate agent commissions, and advertising costs. You should deduct all these costs before paying tax. What you need is to calculate the cost and subtract them

from the sales price of your home. This will, in turn, influence your capital gain tax positively.

HOME IMPROVEMENT AND REPAIRS

If you spent on the renovation to make your property more attractive and to increase its value before selling, you shouldn’t hesitate to deduct the money spent. The deduction may include the money you spent on renovating the roofing, painting the house, repairing the water heater, and so on. However, there’s a condition attached to this as well. For you to be qualified for a home improvement and repairs deduction, the renovation must be done within 90 days of the closing. If not, you may not be able to deduct the amount spent on renovation.

MORTGAGE INTEREST

Just like property taxes, you can also subtract the interest on your mortgage for the number of years the home was yours. However, there’s also a clause to this. According to the 2018 tax codes, whether you’re a homeowner or home seller, you can deduct the interest on your property up to only $750,000 of mortgage debt. On the other hand, if you got your mortgage before December 15, 2017, you are entitled to continue your deduction up to the standard amount of $1 million.

PROPERTY TAXES

This is another tax deduction you don’t want to miss. If you have been promptly paying your property taxes until your home was sold, you can subtract the amount you paid in property taxes up to $10,000.

If you sold a home recently, these are some of the tax deductions you’re entitled to. You shouldn’t hesitate to take advantage of them.

References

https://www.realtor.com/advice/sell/tax-deductions-whenselling-a-home.amp/ https://www.kiplinger.com/slideshow/taxes/t054-s001-mostoverlooked-tax-deductions-breaks-2019/index.html?amp