Sellers - IRS Tax Tips when you sell!

Here are the IRS's top 10 tax tips for home sellers:

1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.


2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).


3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.


4. If you can exclude all of the gain, you do not need to report the sale on your tax return.


5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.


6. You cannot deduct a loss from the sale of your main home.


7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.


8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.


9. If you received the first-time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year's tax return.


10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.

These tips can be found on the IRS website at http://www.irs.gov/newsroom/content/0,,id=104608,00.html.

Home Improvements BEFORE You Sell?

Lets face the facts; today's home buyers are LESS WILLING to COMPROMISE! 

Sellers Temptation: To clean up the yard, de-clutter the house, and put it up on the market without spending a dime. Why would you want to right? Your trying to sell in this market and break even or make as much profit that you can! WRONG!

Some agents will recomment you do AS LITTLE AS POSSIBLE to get your home ready for sale. And I am not saying this won't work...if you are pricing it at a bargain. However, most buyers in today's market are nervous and picky. They are not in a hurry and want a house that is in move-in ready condition.

So as a seller what do you do? Of course you don't want to invest in your home when you are trying to sell and not get back your investment! Well....here are a few key things to consider when deciding what to do before you list:

1. Find an agent who can see the vision and potential in your home. It can COST YOU A SALE if you don't. One agent told a seller not to do anything before listing (For their reputation I will not mention any names). The house was nice but the seller's furniture was too large and made the rooms look small and the hardwood was damaged by the dogs, and the yard was overgrown. After the house didn't sell another agent was hired (Guess who?) who recommended a large list of items to address BEFORE listing the home. Unfortunately, due to the market decline, even thought the house sold quickly with multiple offers now, it solf for less than what it would have if it showed right the first time it hit the streets!  So the lesson here is...find the agent who is looking out for you! Sometimes we don't tell you what you want to hear (like don't do anything we will sell your house fast anyway). Find the person who will tell you the TRUTh (ex: do these repairs and then i can list your home). The wait will be worth it when you actually sell!

2. When you find the right agent. Ask for a list of contractors who you can call to help get the work done for competitive prices.

3. Have the agent prioritize the list of To-Do's for you in order to get a timely sale. Typically the kitchen is a good place to start. Usually some cost-effective improvements like changing light fixtures, changing cabinet hardware, replacing a out-dated floor, or painting can be all you need. At times it may make sense to change a countertop or old appliances. However, gutting a kitchen or remodeling it is not usually going to get your money back at the sale.

4. PAINT PAINT PAINT! Paint is a great idea and sometimes one you seller's take on without any advise. Paint is the most cost effective and likely the best return on your investment, PROVIDED YOU USE THE RIGHT COLORS! That is what we are here for. If you don't know let us help pick them out! We run with buyers everyday and know what the Majority are looking for. When you are selling you can't paint what YOU like. It is no longer about you but ITS ABOUT THE NEW BUYER! We are here to make suggestions based on our experiences and expertice!

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