If you’re selling your home, there are a few things to know about federal taxes. If you make a profit when you sell your home, you may need to report that as a capital gain when you file your taxes.
However, most individuals don’t need to report the sale as a capital gain if the profit is less than $250,000, or less than $500,000 for couples filing a joint return. That’s as long as you owned and used the property as your main home for two of the past five years.
Here are a few other important points:
1) A loss on a home sale is not deductible.
2) If you claimed a homebuyer credit and sold within three years, you may have to repay the credit.
3) When you move, update your address with the IRS using Form 8822 so you can receive refunds or any correspondence.
For more information on selling your home, see Publication 523, available at www.irs.gov.