After you sold your house?

Question

Did you just calculate the profit as the difference between original sale price minus re-sale price/closing costs? If so, doesn't this give you an inaccurate & inflated profit? I mean, shouldn't you factor in the years of repairs, property taxes, expenses, insurance, etc. to fully realize what you earned before patting yourself on the back?

Net Advisor™ · Accepted Answer

I am not a tax advisor, with that said, generally one can add the repair costs to the home's price basis. One also will need good receipts and proof of upkeep/ repair/ and upgraded editions, etc. payments.

Insurance, taxes of any sort cannot be added to the cost basis of a home.

You get a property tax deduction, a mortgage interest deduction subject to exemptions each year WHILE one is in the home.

In general, the cost basis for the home is the NET proceeds minus the cost basis.

If one is married and files jointly, there is an exemption of I believe $500,000 on the profit of the sale of a primary residence. The exemption is $250,000 for single filers. This exemption does not apply to investment or rental property.

These exemptions also depend on how long one lived in the house.

See links for more FAQ. Also see a CPA for tax advice.

edit:
oh, boy's answer is far from correct.

Oh Boy! · Answer

Good point, but if you're going to do that shouldn't you ADD the cash rent you would have paid if you hadn't owned the home?

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After you sold your house?

2 Answers