Hi cmash!
You'll report the sale of your home on your 2024 tax return. You probably received a 1099-S after the sale closed. Even if you didn't receive this form, you'll want to include the sale on your tax return. TurboTax asks you all the necessary questions to correctly calculate the gain or loss.
If this home qualified as your primary residence, you can exclude the gain on the sale up to $250,000 if you're single or $500,000 if you're married filing joint. If there is gain more than the $250K/$500K, then that portion will be taxed as capital gains.
In order to exclude the gain, you (and your spouse) must have lived in the home for two out of the past five years. You can exclude the gain on sale of your primary residence once every two years. If you have a loss, you aren't able to claim that loss.
You calculate the gain by comparing the sales price, less expenses of the sale, to your cost basis. Cost basis includes the original purchase price, plus any capital improvements you made to the property. The fence you mentioned would be an improvement to add to your purchase price.
For the cash donation, you can claim that as an itemized deduction. If your total itemized deductions exceed the standard deduction, you will choose to itemize and be able to get a tax benefit for that donation. You'll want to make sure the charity is a qualified tax exempt organization. You can verify this at IRS Exempt Organizations Select Check. You'll need a letter or receipt from the charity confirming the donation and that you didn't receive anything of value in exchange. For 2024, charitable donations are limited to 60% of your Adjusted Gross Income (AGI).
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Kimberly, CPA for over 30 years
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