If you sold a home last year or are planning to sell this year, you may be wondering if there are any tax benefits to selling. The short answer is yes! The long answer is to work with a tax professional to make sure you take any appropriate deductions correctly. The new tax code, the Cuts and Jobs Act, still allows home sellers to benefit financially come tax time.
We've compiled a list of the most common tax deductions for home sellers.
- Selling Costs- You can deducts the cost of selling a home as long as it is your primary residence and you've lived in that home for at least 2 of the last 5 years. Costs may include home staging costs, Realtor commission fees, legal fees, etc. You can’t deduct these costs in the same way as you would mortgage interest, however. Instead, they will be subtracted from the sales price of your home, decreasing your potential capital gains tax.
- Property Taxes- You can deduct the amount you paid in property taxes, up to $10,000.
- Mortgage Interest- Under the new tax code, home owners can deduct the interest on up to $750,000 of mortgage debt. If you got your mortgage before Dec. 15, 2017, can continue deducting up to the original amount up to $1 Million.
- Home Repairs and Improvements- If you make repairs or improvements to you home, in an effort to make the home more marketable, you can deduct those costs. But, you have to make those repairs within 90 days of closing in order for the cost to be deducted.