There are five excellent tax deductions that homeowners can take advantage when they sell their properties:
1. Selling costs. You can write off some of the selling costs on your taxes, including legal fees, escrow fees, advertising costs, real estate commissions, and sometimes even staging fees. Keep these in mind as you fill out your taxes; they’ll subtract those amounts from your sales price.
2. Home improvement repairs. If you’re renovating your home, you can write off some of the costs. The caveat is that you can only write these off if they take place within 90 days prior to the transaction.
3. Property taxes. You can deduct up to $10,000, but only if you’re actually paying them.
4. Mortgage interest deductions. You can deduct your mortgage interest for the portion of the year that you’ve owned your home.
5. Capital gains. You do need to pay a capital gains tax, unless the property was your primary residence for two out of the last five years. Investment properties do not apply to this deduction. There are a few other stipulations, as well—a single person can deduct up to $250,000, and married couples up to $500,000.
If you’re looking to buy or sell real estate, please reach out to us. We’d be more than happy to help you get to the finish line.