Truth 32Increasing your home’s tax basis
When you sell your home, you naturally want to get top dollar. But from a tax standpoint, that could be costly.
True, most homeowners find that when they sell, they won’t owe any tax on the profit. As long as the money they make on the transaction comes in at or below the exclusion amounts of $250,000 for single taxpayers, and twice that for couples who file jointly, the IRS doesn’t get a cent. (You can read more on the home-sale tax break in Truth 33, “Home-sale tax exclusion.”)
But if you’re worried that you might exceed the sale-exclusion limits, your home itself might offer a solution. Some structural changes or improvements you’ve made to the place could change your sale’s tax situation ...