Top tax attorney Senen Garcia, founding partner of SG Law in Miami, FL, shares key information about selling a home amid the coronavirus pandemic. For more information please visit http://www.sgarcialaw.com
— In a recent interview, top-rated tax attorney Senen Garcia, founding partner of SG Law in Miami, FL, revealed all the need-to-know info about selling a home amid the coronavirus pandemic.
For more information please visit http://www.sgarcialaw.com/
When asked for a comment, Garcia said, "Due to the financial conditions brought on by COVID-19, many Americans have begun considering selling their home. While it might be tempting to rush through the process during this tough time, certain things should be carefully thought out, such as how to minimize tax liability while selling your home."
In selling a primary residence, Garcia pointed out that someone is only taxed on the home's sale price less the amount originally paid plus closing costs and any improvements.
When asked what constitutes improvements, he said, "This is considered any expenses that increases the value of a home. This could be adding a pool or bedroom or even renovating a kitchen. It's important to keep in mind, though, that repairs for any damages do not count as improvements."
“It’s possible to sidestep paying taxes on this gain if you’ve occupied your home for a minimum of 2 years in a five-year period. If you’re a single filer, you can exclude paying taxes on up to $250,000 of gain on the sale of your house if you’re a single filer and $500,000 of gain if you’re married filing jointly,” he added.
Garcia was quick to point out that people who don’t meet the two-year requirement of living in their primary residence in the five years could still avoid paying taxes.
"In this case, you might be able to avoid paying taxes on a primary residence in only a limited number of circumstances - and it'll be a smaller amount. Some of the scenarios include a change in employment, health problems, or unpredictable life events such as a divorce or the need to buy a larger home due to having children," he said.
Garcia further alluded to the fact that the tax implications for selling a personal residence can be quite complicated.
“If you’re in the process of considering whether or not to sell your home but are unsure how to navigate the tax situation, make sure to contact a seasoned tax attorney to understand how best to limit your tax exposure,” he said.
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