Know How You Can Save Tax While Selling A House
Selling a house in Houston? Well, if yes, you must know that you can save a plenty of taxes while selling a home in Houston or across any corner of the globe. However, there are certain tax tips that should be followed in order to avoid paying a hefty amount of tax while selling a house.
Here are some of the common tips that are usually ignored while selling a home. Follow these tips to sell your home like a tax saving pro!
1. Pass Ownership & Use Test While Selling a House:
Selling houses at different time period can result in different results. For example, if you are selling your home within the first 3 years of your purchase, the capital gain will be termed as a ‘short term capital gain’ and is levied with a marginable tax. On the other hand, if you plan to sell your home after 3 years of possession, it will result in a ‘long term capital gain’ that comes with 20% tax rate.
However, if you planning to sell house fast Houston, after 5 years of purchasing it; and 2 years of living in it, you can escape a fixed amount of gain from the sale.
2. Sell Your Home Where You Have Lived the Most:
Selling a house usually comes with various conditions and guidelines. This becomes prominent in case you own multiple homes at one time.
In such cases, the above mentioned point can be implied only on your main home. If you want to enjoy tax benefits out of the sale of your property, make sure you are selling the house where you have lived the maximum number of years; as it will be considered as your main house.
3. Think About Exclusion Limit While Selling a House:
Tax-free amount varies according to your status! If you are still a bachelor, you can treat $250,000 as a tax-free amount. On the other hand, it differs from that of the married couples; they can treat $500,000 as a tax-free amount while selling a home.
This exclusion can be used every time you sell a house where you have lived for at least 2 years. To note here – in case, you are selling the house at loss, you won’t be able to include the loss amount in it.
4. Sell Your Home without Reporting:
One of the secret tax tips state that you don’t have to report a sale every time! Yes, this’s true! In case, you are selling a house without making any profit, you might not require reporting for the sale. This is applicable when the sale of your house doesn’t exceed the above mentioned amounts.
Though the above mentioned tax tips can save you from paying a bulky amount of tax while you plan to sell house fast Houston, there are several other ways that make the process easier for you! Rather than selling the house directly or plan to sell your home on your own, you can get in touch with Realty Simplified, LLC.
At Realty Simplified, LLC, we buy houses in Houston within a few steps while taking care of all the paper-works and legal procedures. Give us a call to know more about how you can sell your home at the fastest speed and get spot cash offers on it!