Have you recently sold your Washington, DC area home? With tax season upon us, a recent home sale can have an effect on your tax return. Read on to learn more about capital gains.
What Tax Exclusions Can I Make If I’ve Sold My Home?
You could exclude up to $250,000 of gain from selling your primary residence (or $500,000 if you’re married) from your federal tax return. In order to qualify for this exclusion:
- You need to have owned the home as your main residence for at least two of the five years before its sale.
- You may not exclude gain on another home you’ve sold during the two years before the most recent sale.
- There are special rules for armed, uniformed and foreign services.
- If you’re able to exclude all the gain from your sale, you’re not required to report it on your federal tax return. If you aren’t able to exclude all the gain, you should use a Schedule D of Form 1040 to claim the exclusion you qualify for.
What Happens If I Don’t Qualify?
You can still use a reduced maximum exclusion amount if you had to sell your Washington, DC home because of health reasons, employment opportunities or unforeseen circumstances.
What Happens If I Have More Than One Home?
If this is the case, you are able to exclude the gain from the sale of your primary residence only. If you happen to live in more than one home on a regular basis, your primary residence can be considered the one you spend the most time in.
Need Help Selling Your Washington, D.C. Home? Contact Us!
As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about home selling tips.
Long and Foster Realtors