Will I Owe Taxes on the Profit From Selling My Glenview Home?

Thinking of selling your beautiful home in Glenview or Northbrook but wondering what the tax implications of such a move will be. Well, here is the answer to one such question that may be "taxing" your mind: Do I have to pay taxes on the profit I make from selling my home?

Since the law was changed in 1997, single homeowners may be able to enjoy a profit of $250,000 while married-filing-jointly homeowners can make up to $500,000 without having to pay taxes on the profit. The only stipulation is that the homeowner(s) owned the house for at least two years before the sale and lived in it for at least two years during the last five years prior to selling.

There are also some loopholes for people with unforeseen circumstances who may have to sell their home before they reach the two-year residency requirement. The IRS lists the following situations as the circumstances which can qualify homeowners for this partial tax break:

• Death
• Legal separation or divorce
• Loss of a job that qualifies the homeowner for unemployment compensation
• Changes in employment that make paying the mortgage and basic living expenses difficult
• Multiple births resulting from a single pregnancy
• Sale caused by a man-made or natural disaster
• Property was "involuntarily converted" (for example, being taken over by the government under laws of eminent domain)

For homeowners in such circumstances, a partial tax-free amount of profit can be prorated.

If you meet the residency requirements or have suffered one of the above-mentioned unforeseen circumstances, chances are you can make some profit on your home that will be tax-free. Contact the Marla Schneider Team and let her help you with these and other questions you may have. Marla has many resources at her disposal and is ready to help in any way she can when you decide to sell your Glenview or Wilmette residence.