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We sold and bought homes in 2016. The new one cost less than what we sold our old one for, but we used the difference for upgrades on the new home. How do I handle this?
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We sold and bought homes in 2016. The new one cost less than what we sold our old one for, but we used the difference for upgrades on the new home. How do I handle this?
For the home purchase, the deductions that are available to you would be interest, real estate taxes, points and private mortgage insurance. You may have received a Form 1098 for the interest and points. Enter in the Your Home section under Deductions & Credits
For the home sale, you may qualify to exclude from income all or part of any gain from the sale of your primary residence if you meet ownership and use tests. This means for the 5-year period ending with the sale of the home, you lived in it as your main home and you owned it for 2 years.
If you meet both tests, you may exclude up to $250,000 ($500,000 on joint returns) of gain from your income, and you would not report it on your return.
Do not report the sale of your main home on your tax return unless:
- You have a gain and do not qualify to exclude all of it,
- You have a gain and choose not to exclude it, or
- You have a loss and received a Form 1099-S.
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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We sold and bought homes in 2016. The new one cost less than what we sold our old one for, but we used the difference for upgrades on the new home. How do I handle this?
For the home purchase, the deductions that are available to you would be interest, real estate taxes, points and private mortgage insurance. You may have received a Form 1098 for the interest and points. Enter in the Your Home section under Deductions & Credits
For the home sale, you may qualify to exclude from income all or part of any gain from the sale of your primary residence if you meet ownership and use tests. This means for the 5-year period ending with the sale of the home, you lived in it as your main home and you owned it for 2 years.
If you meet both tests, you may exclude up to $250,000 ($500,000 on joint returns) of gain from your income, and you would not report it on your return.
Do not report the sale of your main home on your tax return unless:
- You have a gain and do not qualify to exclude all of it,
- You have a gain and choose not to exclude it, or
- You have a loss and received a Form 1099-S.
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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