A sale of a house

[8079]

I was given a grant bargain and sale deed to a house that I lived in for four years. I was paying the mortgage for the owner for four years. And in June 2024 the garage door on the house broke. I let the owner know that I could only pay for The mortgage or the garage door, not both. He didn’t like that so he said he was going to foreclose on the house. I called one of those businesses that will buy your home real fast and I showed them that I had a bargain and sale deed to the house and I was able to sell it so the house sold the seller offered me $305,120 and then on August 21 2024 a wire transfer  of over $223,000 and then $10,000 more will be added once we leave the house so I’m wondering what are my taxes gonna be for this transaction? Thank you!

[Loretta P]

Hello 8079, congratulations on the sale of your house.

Taxpayers are only taxed on the gain or profit from selling the house.  The profit or gain is determined by subtracting the sales price from the purchase price.  If the sales price is higher than the purchase price there is a gain on the sale.  If the sales price is lower than the purchase price there is a loss on the sale. 

You are unable to deduct a loss on the sale of your personal residence on your tax return; however, you are able to exclude some or all of the gain on the sale of your personal residence if you meet the criteria.

If you lived in the home for a total of two (2) of the last five (5) years before the sale, you are able to exclude up to $250,000 of the gain on the sale of the house if filing as Single and $500,000 if filing as Married Filing a Joint Return.  

Tax Aspects of Home Ownership: Selling a Home 

[8079]

Thank you