Tax Deductions Reno Home Sellers Need to Know About
Tax day falls on April 17th this year. That gives you just over a month to file your income taxes. Many sellers took advantage of the high buyer demand and sold their Reno homes in 2017. As such, there are a few tax deductions Reno home sellers need to know about before they file their taxes this year.
Reno Home Seller Tax Deductions
Property Taxes and Mortgage Interest
Just like every other year you’ve owned your home, any property taxes and mortgage interest you’ve paid on your Reno home before you sold it are deductible. Under the new tax law for 2018, property taxes are capped at $10,000. Also, the mortgage interest deduction stops on anything over a $750,000 mortgage debt. Previously, this stopped at $1,000,000. For most Reno home sellers, this won’t be an issue.
Expenses Involved with Selling Your Reno Home
Did you make some home improvements or repairs before you sold your home to attract buyers? If they were done within 90 days of closing, you might be able to deduct your costs. Likewise, Reno home sellers can deduct any real estate commissions, escrow fees, and legal fees paid throughout the home sale process.
Did you sell your Reno home because of a job change? Then, you’re allowed to deduct your moving expenses. The 2017 tax season is the last year this will be available, though. The new tax law signed by President Trump late last year eliminates this deduction. Only military members on active duty will be allowed to utilize this deduction from now on.
Capital Gains Tax
As a reminder, capital gains only applies to any profit made over $250,000 for a single filer or $500,000 for a married couple filing jointly. While not an actual tax deduction, it’s nice to know that this money won’t be taxed. However, you must have lived in your Reno home for at least two of the last five years to take advantage of this tax break. Some lawmakers are lobbying to change that to a minimum five years of residency out of the last eight before homeowners can avoid a capital gains tax.
To be clear, I am not a tax specialist in any way, shape or form. You should always discuss these tax deductions with your accountant or lawyer before filing your taxes. But these definitely give Reno home sellers food for thought. Good luck! And, if you’re in the market for another Reno home, contact me.