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Capital Gains Tax

Capital Gains Tax: Save yourself (or someone you know) from losing $10,800.

The Home Sale Exemption is one of the best tax breaks the IRS has. If you're not familiar with it: if you've owned a home AND it was your primary residence for at least 24 out of the last 60 months and then you sell it, the profit on the sale at closing is tax free (consult your tax professional regarding all tax issues). So, if you make a $40,000 profit from the sale of your home, you DON'T pay the $10,800 in Capital Gains Tax.

Most people don't realize that you could use the Home Sale Exemption even if you don't meet the 2 year (primary residence) requirement. If you had to move out of your home before your 2 years were up because of an unforeseen circumstance, you might still be able to get a partial tax break.

So what's the "unforeseen circumstance"? Unforeseen Circumstances are defined very liberally. They include natural disasters, change in employment, becoming self-employed, divorce or legal separation, and oddly enough--multiple births. So if you had to move before your 2 years were up, talk to your tax professional to see if you might still qualify for part of the Home Sale Exemption.