Tax expert and author Frank Ellis walks readers through tax breaks available with home sales in an article available now on the Americantaxservice.org website.
July 11, 2016 — “Capital Gains and Your Home Sale” is an article recently published at Americantaxservice.org. Tax planner and author Frank Ellis reveals that the best tax breaks can be found by selling one’s home. For example, selling a primary home can yield up to $250,000 in profit, more if married, according to the author. The rules changed in 1997 with the Taxpayers Relief Act, easing burdens for many homeowners.
Although various requirements need to be met, taxpayers don’t have to use proceeds to purchase another home, and are not limited to how many times a home sale exemption can be used. Ellis details some requirements. These include the property being the principal residence of the taxpayer, and they live there two to five years before selling the house. Also, the author says, one does not have to file anything if their gain does not exceed the limit.
The article also reveals that with the sale of a second home, the gains are taxed based on how long one lived there and it was not their main residence.
Rules for married couples are explained next. The new rules enable them to profit more, although sales are not always tax-free and ownership can be by either spouse. A couple of points about the two-year eligibility rule are clarified, while it’s clearly pointed out that one can sell a home only once every two years.
The article also explains how to determine the exclusion amount. Taxpayers also don’t have to meet every test, as partial exclusions and tax breaks are also provided by the IRS. These include a prorated tax-free gain mentioned by the author. Also explained are special rules in special circumstances, such as those related to military members or when a spouse dies.
Lastly, the benefits of filing taxes online are covered. Benefits include importing W-2 information into tax returns, and a free online tax refund estimator that’s linked to. To learn more, go to http://americantaxservice.org/capital-gains-and-your-home-sale/.
About Frank Ellis
Frank Ellis is a Traverse City Tax Preparation Planner and published author. He has written tax and finance related articles for eight years and has published over 900 articles on leading financial websites.
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