Selling your home is a big event that involves a lot of time and effort. The work does not end once the house is sold and not even after everything is packed up and moved into the new residence. One important item that you need to pay attention to is the tax implications when you sell your home. In fact, you should think about how your home sale will affect your taxes before you sell your home.
When you sell your home, whether you made money on the sale of your home or you sold your home at a loss, your taxes are affected. Review the following tax tips about selling your home, so you:
Many Americans are in the unfortunate position of owing more than their homes are worth, due to a steep decline in property values. If you sell your home for less than you owe on it, there are important tax implications you need to know about.
Fortunately, The Mortgage Forgiveness Debt Relief Act of 2007 allows you to exclude income forgiven debt on their primary residence. There are restrictions, such as:
Any time you you move, it is important to update the IRS with your new address, so you receive any tax refunds or IRS letters or notices that are sent to you. You can use the IRS Form 8822, Change of Address, to notify the IRS of your address change.