Question

What should I fill in the House Selling Price, is it the total house price with my loan or the cash I received after payoff the loan

Forum|Forum|4 years ago
January 7, 2022
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VolvoGirl

Employee

Loans and cash proceeds don't matter. So it is just the full total selling price before the loan payoff.

L

lvganglvgangAuthor

in that case the gain will include my loan. e.g I sell my house for 1 million and the loan is 500k. If I fill in the selling price as 1 million, then the gain will be 1 million, which is not the right number

VolvoGirl

Employee

Well you still need to enter your original COST. What you originally bought it for, which includes a loan and down payment. But not any refinanced loans, just the original loan. What you you buy it for? Or did you inherit it? You didn't get it for free did you?

The gain or loss is simply the Selling price minus Cost. Doesn't matter if you got a loan or paid cash for it.

And for a primary home, if you owned and lived in your house for 2 out of the last 5 years on the date of sale when you sell you can exclude the gain up to $250,000 for single or 500,000 for married from tax.

Selling your Home, IRS publication 523
http://www.irs.gov/pub/irs-pdf/p523.pdf

See IRS Topic 701 Sale of Home
http://www.irs.gov/taxtopics/tc701.html