22 The Queens Courier • FEBRUARY 4, 2016 for breaking news visit www.qns.com tax tips Your Home Sale and Capital Gains BY BARY LISAK What is the best tax break available to John and Jane Taxpayer? If they’re homeowners, it’s selling their home. When you sell your primary residence, COMMUNITY Transactions, from the real estate closing agent. To avoid getting this form, you must certify that you meet the ownership, use, and timing tests that were noted earlier. 7. Surviving spouse rules. Surviving you can make up to $250,000 spouses have a special provision: If in profits if you’re single, $500,000 if they sell their residence within two you’re married; and not owe any capital years of their spouse’s death, the gains tax. Here are some specifics: $500,000 exclusion will be retained 1. Ownership and use tests. To although they are probably filing single claim the exclusion, you must meet or head of household the following the ownership and use tests. This years. means that during the 5-year period 8. The new 3.8-percent tax. For ending on the date of the sale, you 2013, a new 3.8-percent tax on net must have: sale of your main home, you may be tax-free gain. For example: Single investment income from couples • Owned the home for at least two able to exclude up to $250,000 of the taxpayer lived in his home for 12 with adjusted gross income above years (the ownership test) gain from your income ($500,000 on months, and then sold the home $250,000 ($200,000 for singles). In • Lived in the home as your main a joint return). Any gains over these because your employer asked you cases where the gain is greater than home for at least two years (the use test) thresholds are reported on Form to relocate to a different office. You the home’s exclusion amount of • You can claim the exclusion only 1040, Schedule D. If you owned your calculate your partial exclusion: 12 $250,000/$500,000, the tax will affect NEWSPAPERS once every two years home for more than one year, the months divided by 24 month (for a only the amount above this benefit. 2. Calculating Your Cost Basis. The gain is reported as a long-term gain. ratio of .50) times your maximum 9. More Than One Home. If you formula for calculating the gain or 4. Loss. You cannot deduct a loss exclusion of $250,000. The result: have more than one home, you can loss of your home involves subtracting from the sale of your main home. you can exclude up to $125,000. exclude gain only from the sale of your your cost basis from your selling price. 5. Partial exclusion. Even if you If you gain is more than $125,000, main home. You must pay tax on the The cost basis includes your purchase don’t meet all the home-sale exclusion you include only the amount over gain from selling any other home. If price, initial closing costs, and all tests, your tax break might not $125,000 as taxable income. you have two homes and live in both home improvements; to this amount be totally lost. When an owner sells 6. Reporting the Sale. You generally of them, your main home 99*is ordinarily add all selling costs. Subtract this cost his house because of special conditions; do not need to report your home sale the one you live in most of the time. basis amount from the selling price. such as change in health, on your income tax return, as long as For additional information, refer This is your taxable gain or loss. employment or unforeseen circumstances, you did not receive a And Form 1099-S, to IRS Publication 523, Selling Your that’s 3. Gain. If you have a gain from the he’s eligible for a prorated Proceeds from Sale of Real Estate Home. We like saving like to help you.never been a Call to schedule 181 Call to schedule an appointment! * For first time customers only. Includes:s At Gilman $NEWSPAPERS At Gilman Ciocia, you’ll pay just $99* for tax preparation. never been a better time to take control of your taxes. We like saving people money on their taxes – and we’d like to help you. With the economy the way it is, there’s Call to schedule an appointment at our new office! 35-30 Francis Lewis Blvd., Suite 205 181 East Jericho Turnpike Flushing, NY 11358 718-683-5722 Mineola, NY 11501 516-277-9499 www.gtax.com * For first time customers only. Includes: basic federal and state return. Does not include any additional forms and/or schedules, Cannot be combined with any other offer. 143607C COMMUNITY And that’s only the beginning. ANTON which will incur extra charges, Offer available for 2015 tax returns only. Limit one coupon per customer.
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