All Forum Posts by: Tess Fike

 Been reading through it this afternoon, thanks for pointing me in that direction! Always a fine line of what could be a capital improvement but doesn't necessarily fall under that list..

Thanks Joe! I agree - we will hire a tax professional to make sure we have all of our bases covered. We're in a unique situation and wasn't sure if anyone on here has experienced something similar to us! 

 

@David M. Unfortunately I don't think we would qualify for the prorated exclusion as there was no "valid" reason under the exclusion for us to sell (i.e. job change or health-related). We simply are taking advantage of the current market.

@Caroline Gerardo In regards to the 6% commission eating all the LTCG tax, from my research I was under the impression that only the 6% commission would reduce the amount taxable, i.e. reduce the $113,000 down to $95,230 - decreasing LTCG from $16,950 to $14,285 (15% of $95230)?

• My husband and I purchased a home that we used as our primary residence in June 2020 for $182,000
• We are now selling it for $295,000 in July 2021
• We currently fall into the LTCG category of 15%
• Our new home is being purchased for $425,000 (also primary residence)

I was wondering if someone could give me a list of deductions that will "decrease" our profit that will result in a decrease of our LTCG amount?

We're set to make $113k gross profit, but we've put about $20k into the house in repairs and upgrades. I also know you can deduct agent commission, closing costs etc... I suppose my question is, according to the IRS is the sale of property A (old) and a purchase of property B (new) seen as one large transaction where you pretty much can deduct as much as possible from the profits of the sale of the old property (i.e. deduct the closing costs of the new house?)

Hopefully this makes sense!