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Am I eligible for the tax break?
There are three main criteria you must meet to qualify for this tax break. Details of these criteria are listed below:
- Ownership - You must have owned the home for at least two of the five years prior the date of the sale. However, the years do not need to be consecutive.
- Use - Similar to the ownership criteria above, the use criteria requires you to have lived in the home for at least 2 of the 5 years prior to the sale.
- Timing - You can only claim this tax break once every two years. This means that if you sold more than one home in one year, you can only claim it for one of them.
Will I have to pay any taxes on the profit I made off the sale?
If you meet all the criteria listed above, you will be eligible for the tax credit. If you are a single filer, you can get an exclusion of up to $250,000. This means that all the profit that you made up to $250,000 will not be taxed. Any profit you made above this amount will be taxed. If you are married and/or file jointly, this amount doubles and increases to $500,000.
Unfortunately, you cannot use this exclusion if you sold your home for a loss.
What if I am no longer with my spouse?
If you owned a home with a spouse but have since separated, there are special circumstances in which you would still qualify for either a full or partial exclusion. These circumstances include but are not limited to divorce settlements or separation agreements. R&G Brenner tax specialists can help you figure out if you qualify for exclusions under any special circumstances.
Let our tax specialists here at R&G Brenner take care of the hard work so you can get back to enjoying your new home.
