The Minnesota Realtors put out their annual housing report again this year in early February. Following are a few key metrics from the 2025 housing report that may be of interest to both buyers and
Capital Gains - Avoid Taxes by Keeping Track of Improvements
Dated: June 21 2023
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The other day I received an email from one of my Realtor associates that included information that I had not given much thought to recently. As I read the email, it prompted me to think that I should share this with all of you. As always, check with your tax person for the best information.
Many of us as homeowners are aware that when you sell your home and you meet certain conditions, the IRS says you may exclude the first $250,000 of gain from the sale of your home from your income and avoid paying taxes on it. The exclusion is increased to $500,000 for a married couple filing jointly.
Today homes are so much more expensive that it is entirely possible to have gains from the sale of your home that will be greater than the IRS limits set in 1997.
So a good idea that I want to pass along to you is to keep track of capital improvements to your home that can help you avoid taxes later down the road when you sell it. Create a papertrail of receipts and canceled checks of the improvements that add value to your home.
The IRS Publication 523 (https://www.irs.gov/pub/irs-pdf/p523.pdf) has a lot of the information you need to determine eligibility and improvements that increase your basis.
Taxes are a subject that I will refer you to your tax expert to discuss. However, I am always available to discuss the home improvement projects that will bring enjoyment while living in your home and will catch the eye of buyers when it’s time to sell.
Ruth Lecy
With over 35 years of experience in residential real estate I have the expertise you are looking for. My experience spans from land and lot sales and purchase; to first-time buyers; to luxury multi-m....
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