About the author:

Terry I. Weberman, The Kabinet CPA

Terry is a Certified Public Accountant in the New York Metro area with experience working with businesses and individuals across all backgrounds. He writes articles for the Kabinet blog and is here to help you on your home ownership and/or investing journey. Ask Terry a question by sending an email to info@kabinet.com and put “Terry CPA” in the subject line. This is a complimentary service as part of Kabinet’s commitment to you!

A row of houses

You must understand this tax rule as a homeowner!

Your home has one of the most far-reaching tax benefits in the entire Internal Revenue Code.

A gain on the sale of your personal residence for a single individual is excluded up to $ 250,000 and $500,000 for a married couple.

This means that these amounts are 100% NON-taxable. All that profit accrues to the home owner free and clear. It is an amazing benefit of home ownership.

The home must be used 2 out of past 5 years to qualify, although the 2-year rule can be prorated.

There are other quirks that will not affect the vast majority of taxpayers and as always, feel free to contact me for more information and I will help you.

Kabinet is truly a platform that this law was made for. You must track all expenses from the original purchase of the property as most closing costs go towards increasing the basis (cost) for tax purposes.

All major improvements to the property also go towards increasing the cost, thus qualifying to decrease the gain and staying within the full limits for non-taxability. Kabinet allows you to document those costs and allows you to have receipts at your finger tips should you have need to prove your costs to the Internal revenue Service.

Kabinet allows you to seamlessly and easily claim this potentially $ 250,000 or $500,000 savings at a cost of $49.99. To not have Kabinet as a home owner is crazy! 

Note

Terry, The Kabinet CPA, has made every effort to ensure the accuracy of the information within this article was correct at time of publication. He does not assume and hereby disclaims any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from accident, negligence, or any other cause. Speak to your advisor to make sure you qualify for such benefits or opportunities. Do not rely solely on this abbreviated article, it is for informational purposes only.