I am a real estate agent and am not qualified to offer tax advice. But of course as a California Realtor, there are certain general things I should be aware of. When it’s time to sell your home you certainly want to take advantage of your homeowner’s exemption, which is $250,000 or $500,000 for a couple. I am frequently asked about determining your tax basis.
Every primary residence or rental property has a “Basis”. At the time of sale, your profit is calculated simply by subtracting the Basis from your Sales Price minus your Selling Costs. Generally on a primary residence your basis is the initial price you paid for the home plus improvements made. Please contact your accountant for specific information about determining your tax basis.
Rental basis is similar, except you subtract any depreciation taken. For exact tax information tailored to your situation, consult with an accountant who specializes in real estate. If you are thinking of selling your home and are curious as to which fix-its pay off, give me a call at (818) 790-7325.