Understanding Tax Breaks for Moving

Everybody likes tax breaks. For many taxpayers, the tax break they get on the gain from selling a home is one of the most valuable of all. If you’re thinking the time is right to put your house on the market and it has appreciated in value, make sure your gain will qualify for the home-sale gain exclusion and Get More Info before you make your move.

 

Good Deal

 

Here’s how the home-sale gain exclusion works: If you make a profit when you sell your principal residence, all or part of your gain may be tax-free. Eligible individual filers may exclude up to $250,000 of gain from their income; married couples filing jointly may exclude up to $500,000 of gain.

 

Ownership and Use Tests

 

In general, this tax break is available only once every two years. To qualify, you generally must have owned and used the home as your principal residence for at least two years (a total of 24 full months or 730 days) during the five-year period ending on the date of the sale. The ownership and use periods don’t necessarily have to coincide.

 

Only one spouse must pass the ownership test, although neither spouse may have excluded gain from a previous home sale during the two-year period ending on the sale date. As for the use test, both spouses must pass it. Note that short, temporary absences count as periods of use. So, for example, a three-week vacation tour of Europe would count as time spent in your principal residence.

 

Reduced Exclusion Possible

 

If you don’t meet the requirements for the full $250,000/$500,000 exclusion, you might qualify for a reduced exclusion under certain circumstances: if you have to sell your home because of a change in employment, you move for health reasons, or there are other qualifying”unforeseen circumstances.” The amount of the reduced exclusion is based on the portion of the two-year use and ownership periods you satisfy.

 

Call us today for more tips on how to ensure you’re following business best practices, and let us help you keep your company in the black.

 

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

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