sale of house

Hi @Entitree 

Thank you for joining us today.  You may be eligible to exclude up to $500,000 for married filing joint on the gain on the sale of your home.  You can generally qualify for this exclusion  if you owned and lived in the home for a total of 2 of the 5 years before the sale.

You may receive a Form 1099 S from the title company reporting the sale of the home.  We recommend that you report the home sale on your tax return regardless if you receive the form.  The information on the sale of the home can be found on your closing statement.

To properly report the sale of your primary residence gather the following documents:

• Closing statement when you purchased the home;
• Closing statement when you sold the home in 2023;
• 2023 Form 1099S (you may receive this from the Title Company -- but the same information should be on the 2023 closing statement);
• Receipts from major purchases/upgrades to the home such as a home addition, new roof, upgraded kitchen, etc.;
• Documentation of any casualty losses or tax credits during the time that you owned the home.

Using your documentation you can then determine the adjusted basis of the home starting with the home purchase price, plus the expenses to purchase the home and any major home improvements.  You will also need to reduce this amount by any losses or tax credits.

The sales price of the home is reduced by the selling costs, such as realtor fees, title fees, etc. to sell the home typically listed on closing agreement.  Many of these expenses can be substantial.

The adjusted sales price less the adjusted basis of the home will give you your overall gain.  

TurboTax is great at guiding you through these questions and helping you to capture all of the related costs and expenses.  Here is a link for additional information on items to consider

Selling Your Home 

Thank you!

Melanie, CPA