Tax Breaks on Home Sales 

    by Laura Saunders 
    Published June 21, 2013

    Now that the housing market is starting to heat up again, the Wall Street Journal examined the taxes and tax breaks on home sales. These rules are complicated, and according to Melissa Labant, director of taxation at the AICPA, people often misunderstand them. The most important rule to remember is the principal-residence tax break. Sellers of a principal residence are allowed a tax break—up to $500,000 for married couples and up to $250,000 for singles, if they have lived in the residence for two or more years. This benefit applies to profits on a sale, which excludes the cost of the home and any improvements. “For most homeowners in most markets, this benefit is all they need,” Labant says. While this break is helpful, there are many complicating issues that sellers can run into and expert help is often advisable.




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