If you sold your primary residence and made a profit, you may be able to exclude that profit from your taxable income. Here's how it works.
Individuals can exclude up to $250,000 in profit from the sale of a main home (or $500,000 for a married couple) as long as you have owned the home and lived in the home for a minimum of two years. Those two years do not need to be consecutive. In the 5 years prior to the sale of the house, you need to have lived in the house for at least 24 months in that 5-year period. In other words, the home must have been your principal residence. Just like calculating capital gains, the formula for calculating the gain or loss involves subtracting your cost basis from your selling price.
The formula for calculating your cost basis on your main home is as follows:
Purchase price
+ Purchase costs (title & escrow fees, real estate agent commissions, etc.)
+ Improvements (replacing the roof, new furnace, etc.)
+ Selling costs (title & escrow fees, real estate agent commissions, etc.)
- Accumulated depreciation (for example, if you ever took the office in the home deduction)
= Cost Basis
And then calculating your profit or loss would be:
Selling price
- Cost Basis
= Gain or Loss
Now let's look at how many homes were sold in Midtown Montgomery during June.
Midtown Montgomery real estate sales statistics for June 2014, show the number of homes sold decreased by 27% when compared to June 2013. The average sales price increased by 3.8% to $210,426 for the month. The median sales prices increased by 6.7%, and market times decreased by 47 days from June 2013. The highest selling price increased by 45%, and the lowest selling home price increased by 64% compared to June 2013.
| Midtown Montgomery |
June 2014 |
June 2013 |
| Homes Sold |
26 |
36 |
| Average Selling Price |
$210,426 |
$151,658 |
| Median Selling Price |
$155,750 |
$93,000 |
| Days On The Market |
181 |
134 |
| Highest Selling Price |
$870,000 |
$600,000 |
| Lowest Selling Price |
$15,000 |
$9,100 |
For the latest Midtown Montgomery real estate market conditions in your area, please call me at 800-HAT-LADY or visit HomesForSaleInMontgomeryAlabama.com.
Information is provided by the Montgomery Area Association of Realtors and is deemed accurate but not guaranteed.
