Hello! I'm Lisa Dunn with RE/MAX Results The Change AGEnts Group live from my mobile office (my car)! Here we are at the beginning of 2016 and many of the questions we get this time of year are about capital gains tax. For example: "I sold a home last year, what will that mean for me in regards to capital gains tax as I prepare for taxes?"
First I'll give you some of the general rules about capital gains tax, and then will follow up with the million dollar piece of advice
General rule for single people:
If you've lived in the house for 2 of the last 5 years as your primary residence and didn't use it for rent or business, you'll likely be eligible for the the capital gains exclusion up to $250,000. So, if you lived in a house for at least 2 out of the last 5 years and sold your home last year for $249,000, those dollars will likely be exempt from capital gains tax.
General rule for married couples filing taxes jointly:
The exemption doubles to $500,000.
Here's the Million dollar piece of advice I promised you:
The time to consider planning for capital gains tax is before you stick the for sale sign in your front yard. The time to strategize the best way to sell your home is with your tax advisor before you list your home for sale. Here's why: your tax advisor may be able to help you lower the basis of your home. The best time to have that conversation is when you are in your home, before you start throwing away receipts of work you've done to your home.
We'll continue with these videos for the rest of the year. Make it a great day!