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Sold your home? Don’t forget about these tax deductions

While the real estate market is moving full steam ahead, prime homebuying season is just around the corner.

If you plan to sell this spring, or have recently done so, don’t forget to see if you qualify for a number of tax benefits and deductions. If you sold your home, here are five tax deductions that will make a life a little bit easier.

Property taxes

While the property tax deduction cannot exceed $10,000, home sellers can claim the deduction up until the home is sold.

So, if you sold your home last summer, for example, you are still eligible to claims during this year’s tax filing period.

Costs

Getting ready for a home sale is an investment. Any selling costs you incur are eligible for deductions.

To qualify, you must have lived in the home for two of the last five years and made the home your primary residence.

Only costs associated with the home sale are eligible for a tax deduction. Legal fees, escrow fees, advertising, commissions and real estate services are examples of eligible costs.

Taking the total sales price of the home and subtracting the costs will get the taxpayer to a deduction. This will also equate in any possible capital gains tax, which depends on a number of factors including profit and years of residency.

Note that the above costs are not deducted in the same way as mortgage interest.

Mortgage interest

As noted above, home sellers can deduct mortgage interest for the time period they lived in the home.

Home sellers can deduct mortgage interest based on their interest paid.

Capital gains

For single individuals, the IRS lets you exclude up to $250,000 in capital gains, which is the profit you’ll make when selling the home.

Couples can exclude twice that amount.

In order to qualify for the tax exclusion, the seller must have lived in the property for two of the past five years, at minimum.

So, if the profits of a home are $200,000, then a single taxpayer should have no expectation of paying tax on the financial gain.

Home repairs, improvements

Chances are that before your home hit the market, you made some repairs or home improvement to boost the home’s value.

If so, your investment can pay twice. In addition to adding to the property value, you can also deduct the costs for any upgrades or renovation performed on the home.

From roof repair, new paint, carpet replacement, new energy efficiency features to the installation of a new water heater, home sellers have various ways to gain eligibility for home improvement deductions. Just remember to report it within 90 days of closing on the home sale.

This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice. Please consult a tax advisor for any advice specific to your transaction.

Things you’ll love about living in Idaho Falls

From the moment you set foot into the region, you’ll be immediately struck by all the surrounding natural beauty and the endless recreation opportunities to get out and explore.

Idaho Falls, which is located along the banks of the Snake River, is experiencing new growth as more people choose to relocate to an up-and-coming location.

If you haven’t heard, here’s just a small sampling of what life is like in Idaho Falls.

Real estate value

It’s no secret that real estate prices have gone up over the years.

But if you survey the entire country, it would be difficult to locate a better value than the homes in Idaho Falls.

Perfect for first-time homebuyers, young professionals and families, real estate in this region is relatively more affordable than other parts of the country.

From condos, apartments near the downtown core, to other types of property within the region like trendy residential neighborhoods and rural ranches, homebuyers will be met with a variety of selection and price points.

Sense of community

With a population of over 60,000, Idaho Falls is considered a small city. But it has a big heart and tremendous community spirit you’ll quickly notice when you’re out and about.

Since the majority of residents here own real estate, there’s a bigger focus on putting local dollars into community investments.

The type of community involvement is also felt in the form of activities. Long-term residents and newcomers alike rarely have trouble finding something to do. And they always feel like they are part of a thriving community.

Perfect for families

With big cities, there’s always a give and take for families.

In Idaho Falls, families will enjoy excellent schools, outdoor recreation, places of discovery and learning and even a minor league baseball team. All of these desirable and family-friendly amenities are available without the headaches of big-city living.

When you go out and spend some time with the family, you’ll find enjoyment and peace through the city’s diversity of activities and entertainment that everyone can enjoy.

Near nature

Imagine living in an area that lets you escape into the great outdoors anytime you want without a long drive?

Idaho Falls is an outdoorsy paradise. Here you’ll find some of the best fishing, gaming, hiking and general exploring without having to travel for miles and miles.

The Snake River is an absolute destination but so are the other natural wonders, including some of the nation’s best national parks and local trails.

Living in Idaho Falls puts you smack in the middle of an outdoor recreational hub. The breath-taking views and outdoor experience will never get old either.

Overall excellence

Time and again, this region ranks among the most livable in the nation.

In a recent survey, Idaho Falls ranked among the top 50 places to live anywhere in the country. The survey focused on more than 1,000 cities and collected data about each city’s local economy, roads, housing, affordability, amenities, education, health care and other data points that impact quality of life.

Booming industries

Job growth in the region has blossomed. Even before the pandemic, Idaho Falls boasted a low unemployment rate.

Workers will find a wide range of opportunities, as the city continues to experience growth in the sectors of retail, health care, manufacturing, technical services and more.