Six Tax Facts a Homeowner Should Know before Jan 1st

by Yvette Betancourt

Tax season is just around the corner...about a month or so. Every season, tax rules change or are modified that will have effect on your potential return.  For home sellers, here are six important tax facts that the IRS wants you to know for the upcoming season.  

1. If you've owned and lived in your home for two of the five years prior to selling it, you can generally exclude up to $250,000 of the gain from your income ($500,000 on a joint return, in most cases.) 

2. You are not eligible for this exclusion if you sold another principal residence within the past two years and excluded the allowable gain from your income. 

3.  If you can exclude ALL of the gain from the sale of your primary residence, you don't need to report the sale on your tax return.

4.  If you have a gain on your principal residence that exceeds the allowable deduction, it is taxable. 

5. You can't deduct a loss from the sale of your primary residence.  

6.  Special rules may apply when you sell a home for which you've received the first-time home buyer credit.  (see IRS publication 523, "Selling Your Home," for details.) 

For more information on tax rules and regulations from previous years, go the IRS.gov for the most current forms and publications.  All 2012 forms and publication will be available January 1, 2013.