Please note that the content in this article is purely informational and should not be taken as professional or legal advice. Tax laws and regulations are subject to change without notice. Consult an experienced accounting team like Cedar Rapids Accountants John Freeman CPA before making any serious financial or legal decisions.

Buying and/or selling a home is an exciting time! However, there are tax implications to consider when preparing your tax return depending on your circumstances. 

Most sellers are not required to report the transaction to the IRS unless the profits exceed the $250,000 or $500,000 limit. If that is the case, the excess money is reported as a capital gain on Schedule D. Keep in mind that if you owned and lived in a home for a total of two of the five years before the sale, then up to $250,000 of the profit is tax-free (or $500,000 if you are married). 

Many homeowners don’t realize that after purchasing a home they can deduct their qualified home mortgage interest, points paid on a loan, real estate taxes and private mortgage insurance. 

To learn more about how selling or purchasing a home can impact your tax return, contact us today!