How to Save Money When You Sell Your Property
Section 121 of the Internal Revenue Code creates a tax exemption on the sale of real property owned and used as the primary residence and excludes taxable income up to $250,000 in capital gains per homeowner and $500,000 for married couples filing jointly. The real property must be held and owned as the homeowner’s primary residence and does not apply to second homes, vacation homes, or property that is rented or used for investment or business. Specifically, homeowners are required to have owned and lived in the residence for a combined total of 24 months out of the last 60 months (two of the last five years) in order to qualify. It is not required that the 24 months be consecutive and there are exceptions for ‘unforeseen circumstances.’ As always, contacting a tax professional is the best way to ensure you are properly qualified for any and all tax exemptions that may apply to you.