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Real Estate fg>
Eileen M. Day realtor . ss.'ks
REDUCING TAX ON
SALE PROFIT
If you are selling your home there are ways to reduce the federal tax from any profit you make. If you buy or build a new residence within a period of two years before or after selling your home, the entire gain may be deferred if the purchase price of the new residence exceeds the adjusted sale price of the old residence (gross sale price minus the costs linked to selling the house — like the broker’s commission). .
Also a taxpayer at least SS years old is eligible for a once-in-a-lifetime exclusion of up to $125,000 of gain on property used as a principal residence for at least three years of the proceeding five year period.
Another method of reducing the federal tax is to establish a higher tax basis for the home being sold. The tax basis is the original cost plus capital improvements. Examples of capital improvements are added rooms, a remodeled kitchen, a new roof, central air conditioning, or a new swimming pool. Keep receipts for all of these improvements.
If there is anything we can do to help you in the field of real estate, please drop in at EILEEN M. DAY, Realtor, The Clopton House, Washington, Va. 22747. Phone: 6753400. We’re here to help.
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