Ask Terry Questions i’ m 73 yrs old,doi have to pay after selling my house ?

i’ m 73 yrs old,doi have to pay after selling my house ?

By Terry Savage on December 05, 2014 | Housing / Real Estate

Do i have to pay fed. tax after selling my HOUSE/

Terry Says:  That all depends on your cost basis.  Each owner (so if you have a spouse as co-owner, that means each of you) gets an “exclusion” for up to $250,000 of profit on the sale of your primary residence!

So first you have to determine your purchase price, plus the price of any “improvements’ you made to the property.  And you have to document those improvements, such as building a new garage or installing a new kitchen, or remodeling the bathrooms, or a new heating system.  That’s why it’s important to keep good records of all money spent over the years on home improvements.   Then, depending on the amount of the total gain, less the $250,000 tax exclusion,  (or $500,000 if the home is in joint name and you file joint tax returns), you would owe taxes on any gains in excess of this amount.

This tax exclusion can be used multiple times.  It is not a one-time deal.  So if you were to buy and sell another home in the future, you’d get the same break.  And there is no age requirement.  (You may be thinking of an older, long-gone one time tax break for home sellers over age 55.)  But this is the only deal you get under the current law.  Consult your accountant regarding your specific situation, and to help establish the “cost basis” for taxable gain purposes.



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