Thinking about selling your home? 🏡 Before you put that “For Sale” sign in the yard, it’s crucial to understand the tax implications that come with it. From capital gains to potential deductions, knowing the financial impact ahead of time can help you make smarter decisions and keep more money in your pocket!
💰 Capital Gains: Will You Owe Taxes on Your Profit?
One of the biggest questions sellers have is whether they’ll owe taxes on their home sale profits. The good news? Many homeowners qualify for the capital gains tax exclusion, which means you may not have to pay taxes on up to $250,000 (or $500,000 for married couples) of your home sale profit—as long as you meet certain conditions, like living in the home for at least two of the last five years.
📝 Tax Deductions You Don’t Want to Miss
Selling a home comes with expenses, but some of those costs might actually work in your favor at tax time. Did you know that real estate agent commissions, staging costs, and home improvements made to boost your sale price could be tax-deductible? Keeping track of these expenses can help reduce your overall tax liability.
⚖️ The 1031 Exchange: A Smart Move for Investors
If you’re selling an investment property, you might be able to defer capital gains taxes through a 1031 Exchange—a strategy that allows you to reinvest your sale profits into another property while postponing your tax bill. This could be a game-changer if you're looking to grow your real estate portfolio!
📌 Get Expert Guidance Before You Sell
Understanding real estate taxes can be overwhelming, but you don’t have to navigate it alone! The MK Real Estate Team is here to guide you through every step of the selling process, ensuring you maximize your profits and avoid unexpected surprises.
📲 Thinking of selling? Let’s chat! Whether you're ready to list now or just exploring your options, Ken & Montse Foster can help you make the best financial decision for your future. Contact us today!