Steve Antonucci's Blog
In a nutshell, if you have owned a home for five years and lived in it for at least two out of five years, or if you’ve owned the house for two years and lived in it the entire time, a single person has a $250,000 tax exemption. If you are married, as a couple, you have a $500,000 exemption. Any gains over those amounts are taxable. You should always discuss the sale of your home with a tax attorney, especially if you used the house for business or rented it out, as you may not be able to take the exemption on homes used for business or as a rental.
Figuring the Tax
Before you can estimate how much tax you might owe, you need to calculate the cost basis for the property. Figure the tax by completing these steps:
Figure the Cost Basis
Add the price you paid for the property to the cost of any significant improvements. Subtract any casualty and theft losses, closing costs you paid when you bought the house and allowable depreciation. You might be able to subtract some closing costs. If you inherited the property, the initial investment is the fair market value on the date of the death of the person who willed the house to you.
For gifted properties, if there is a gain, you use the donor’s adjusted basis in the cost basis equation. If there is a loss, the cost basis is the fair market value on the date you received the property as a gift or the donor’s adjusted basis, whichever is less.
Figure the Capital Gain
Once you have the cost basis, subtract it from the sale price of the house. For example, if you paid $500,000 for your home and you are now selling it for $1,000,000, you have a capital gain of $500,000. If you are single, you will pay tax on $250,000. If you are married, the exclusion is $500,000, which wipes out the $500,000 profit.
Reducing the Tax Owed
You may be able to use the Section 1031 exchange if you are selling a home used for business or that was rented out as long as you buy another house for business or to rent out. The new purchase cannot be for personal use and the exchange must be for “like-kind.”
The regulations for a Section 1031 exchange are limited and may be confusing. Always retain a tax lawyer or accountant to help you with your taxes, especially if you are buying and selling an investment property. If you are selling a million dollar plus home and you use it as your personal residence, you should still contact a tax lawyer. Depending on your finances, the tax lawyer may be able to help you avoid some of the tax.
If you want to sell your house, you may want to take a close look at your home's interior. That way, you can identify any potential home interior issues and address them as quickly as possible.
Determining the best ways to transform your home's interior from drab to fab may seem difficult, particularly for a first-time home seller. Fortunately, there are several proven ways to enhance your residence's interior, and these include:
If it has been several weeks or months since you last cleaned your house, there is no time like the present to perform extensive home interior cleaning.
Wipe down countertops, mop the floors and clean every room of your house. By doing so, you can make your house look clean and pristine.
Also, if you need extra help cleaning your home, you may want to hire a cleaning company. With a team of home cleaning professionals at your side, you can speed up the process of improving your house's interior.
Clutter is an eyesore that home sellers should try to eliminate. Luckily, there are many quick, easy ways to remove clutter from your house.
Oftentimes, one person's clutter is another's treasure, and you may be able to sell excess items at a garage sale or online. Set competitive prices for your excess items, and you should have no trouble stirring up interest in these items.
You also can donate excess items to charities in your city or town. Reach out to local charities, and you may be able to get excess items picked up from your house.
3. Interior Upgrades
If you notice home interior lights are no longer working, cracks or dents in your walls or other minor home interior issues, you should spend some time performing various upgrades and repairs.
In most instances, minor home interior upgrades and repairs may require just a few minutes to complete. Meanwhile, these home interior improvements can make a world of difference in the eyes of homebuyers and can help your home stand out to potential buyers.
Clearly, there are many ways to improve a house's interior in no time at all. But if you require additional assistance, you can always hire a real estate agent to help you generate interest in your residence.
A real estate agent knows exactly what it takes to bolster a house's interior. He or she can help you assess your home's interior and prioritize assorted home interior improvements.
Furthermore, a real estate agent will make it easy to navigate all stages of the home selling process. This housing market professional will help you list your house and promote it to large groups of potential buyers. Plus, if you receive offers on your house, a real estate agent can help you evaluate these proposals and make an informed decision.
Don't hesitate to enhance your home's interior. Instead, consider the aforementioned options, and you can take the first step to improve your house's interior.
Believe it or not, selling a home may prove to be expensive if you are not careful. However, if you understand the costs associated with selling a house, you can budget accordingly.
Now, let's take a look at three expenses that home sellers commonly encounter.
1. Home Repairs
Cracked siding, floor damage and other home issues are worrisome, particularly for an individual who wants to sell his or her residence as quickly as possible. Fortunately, if you budget for home repairs, you can address these issues before you list your residence.
Oftentimes, it helps to conduct a home inspection prior to embarking on the house selling journey. A home inspection enables a property owner to gain expert insights into any underlying problems with his or her house. Then, the property owner can prioritize assorted home repairs and complete house improvements as needed.
2. Home Cleaning
A messy home is unlikely to garner buyers' attention. On the other hand, an individual who hires a professional cleaning company to improve his or her residence's appearance may be better equipped than ever before to enjoy a successful house selling experience.
Hiring a professional cleaning company may be costly. Yet if you shop around for home cleaning companies in your city or town, you can find a cleaning business that matches your budget.
Don't forget that you can clean your house on your own, too. If you purchase cleaning supplies and enlist family members and friends to help you clean your residence, you could enhance your residence's appearance without breaking your budget.
3. Home Staging
The cost of staging a house varies based on the size of a residence, the extent of the staging and other factors. But if you allocate time and resources to declutter your residence, you may be able to avoid the costs associated with house staging altogether.
To declutter your residence, you should try to remove any unwanted items from your home. You can list these items online or host a yard sale to eliminate clutter and earn extra cash. Or, you can donate your unwanted items to a local charity or give them to family members or friends.
As you get set to sell your house, you may want to hire a real estate agent as well. With a real estate agent at your side, you can cut down on your house selling expenses and get the help you need to achieve your desired results.
A real estate agent understands that each house is different, and he or she crafts a custom strategy for each home seller. Next, a real estate agent and a home seller work together to put this plan into action. And if a seller ever has concerns or questions during the house selling journey, a real estate agent is happy to respond to them.
Plan ahead for home selling costs – you will be glad you did. Because if you budget properly, you can put yourself in a great position to streamline the home selling journey.
If you are looking to sell your home and move out of a major city, there is no need to worry. In fact, there are many quick, easy ways to ensure that you can enjoy a seamless home selling experience, even if your residence is located in the heart of a major city.
Now, let's take a look at three tips for selling a home in a major city.
1. Know Your Target Homebuyer
Think about what led you to buy your city home in the first place. Then, you can put together a home listing that highlights your home's features, thereby increasing the likelihood that your house will generate plenty of interest from potential buyers.
When you create a home listing, think about a city homebuyer's perspective. By doing so, you can ensure that your home listing hits the mark with the right group of buyers.
For example, if your home is located near popular city attractions, it may be worthwhile to include this information in your home listing. Or, if your home includes a new roof and other upgrades, you should incorporate lots of details about these upgrades into your home listing.
2. Establish an Aggressive Price for Your Residence
What you originally paid for your city home is unlikely to match the value of your residence today. However, with a comprehensive approach to analyzing your home's strengths and weaknesses, you can establish an aggressive home listing price from day one.
It often pays to conduct a home appraisal prior to adding a city home to the real estate market. During a home appraisal, a property expert will evaluate your residence, as well as compare and contrast your house against similar homes. After a home appraisal is finished, you will receive a property valuation that can help you set a competitive initial asking price for your house.
Don't forget to check out the prices of comparable houses in your city, either. With this housing market data at your disposal, you can see how your residence stacks up against the competition and price it accordingly.
3. Collaborate with a Real Estate Agent
If you're unsure about how to put together a home listing, price your residence or perform assorted home selling tasks, you should contact a local real estate agent. By hiring a real estate agent, you can receive expert assistance as you try to sell your city residence.
A real estate agent understands the ins and outs of selling a house in any city, at any time. Therefore, this housing market professional will make it easy for you to maximize the value of your city home.
Oftentimes, a real estate agent will meet with you and learn about your home selling goals. He or she then will add your city residence to the real estate market, promote it to potential buyers and keep you up to date throughout the property selling journey.
When it comes to selling a home in a major city, it helps to take an informed approach. Use the aforementioned home selling tips, and you can boost your chances of enjoying a fast, profitable home selling experience.
Real estate market data is readily available to home sellers across the United States. With this information at your disposal, you should have no trouble maximizing the profits from your home sale.
Now, let's take a look at three real estate market data that every home seller needs to check out before listing a residence.
1. Prices of Comparable Houses
Let's face it – determining a competitive price for your house may prove to be difficult, regardless of your home's age or condition. Fortunately, if you analyze the prices of comparable residences in your city or town, you can better understand how your house stacks up against the competition and price it appropriately.
Furthermore, it may be beneficial to conduct a home appraisal prior to listing your house. This appraisal enables a home expert to assess your house both inside and out. Then, you'll receive an appraisal report that contains a property valuation, which may help you determine a competitive price for your house.
2. Prices of Recently Sold Houses
Are you preparing to enter a buyer's or seller's market? Review the prices of recently sold houses in your area, and you can find out whether the current housing market favors buyers or sellers.
If home sellers are receiving offers at or above their initial home asking prices, now may be an ideal time to list your residence. Thus, you may want to add your house to the real estate market sooner rather than later to capitalize on a housing sector that likely favors sellers.
Conversely, if home sellers are receiving offers below their initial home asking prices, you may want to allocate significant time and resources to find ways to improve your house. Because if you enhance your house's exterior and interior, you may be able to help your house stand out from the competition and increase the likelihood of a profitable home sale.
3. Average Amount of Time That a House Is Listed
Check out how long houses stay on the real estate market before they are sold – you'll be glad you did. With this housing market data in hand, you can assess the pulse of the real estate market and map out your home selling journey accordingly.
If you need help collecting or analyzing real estate market data, there is no need to worry. Hire a real estate agent today, and you can gain the insights that you need to make informed decisions throughout the home selling journey.
A real estate agent is a housing market expert who is happy to help you in any way possible. He or she will provide recommendations about how to price your house and improve your home's interior and exterior. Plus, a real estate agent is available to respond to any of your home selling concerns or questions, at any time.
Ready to list your home? Review the aforementioned housing market data, and you can obtain deep insights into the real estate sector prior to selling your house.