Yesterday we shared 5 tips about how home sellers can reduce their tax liability when selling their homes. Most of them dealt with the qualifications home-owners needed to have in order to have their capital gains excluded. Here are the rest of the tips on how you can owe less on taxes when selling your home.
– If you experience a capital LOSS from the sale of your main home, the loss cannot be deducted.
– Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.
– See Publication 523, Selling Your Home for special rules that may apply when you sell a home for which you received the first-time homebuyer credit.
– You can only exclude a gain from the sale of your main home, you cannot exclude gains from the sale of multiple homes and you must pay the tax gain on them. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.
– Use Form 8822, Change of Address, to notify the IRS of your address change when you move.