Do you know the 5 Year plus One Day Rule ?

For homeowners, this tax law rule is critical for you to understand. Why ?…..well, just about everyone knows that when you sell your primary residence, you are entitled to exclude the first $250K/$500K of gain, depending on whether you file your taxes as a single taxpayer or Married Filing Joint.  There, of course, is a mathematical calculation you must complete ( and a Form to file with your personal income tax return.

https://www.irs.gov/publications/p523/index.html

What most of us do not know is that we can receive this capital gain exclusion again, and again, and again, as long as we abide by the 5 years plus 1-day rule. This rule essentially states that, as long as you lived in your primary residence for two (any two) of the last five years, you can again utilize this wonderful tax benefit.

On the opposite side,  losses resulting from the sale of your primary residence are not deductible, and if you meet a portion of the 5 years plus 1-day rule, you are eligible to receive a pro-rata share of the exclusion. Working with an expert Tax Accounting firm like Core Performance is the ideal way to ensure you achieve the maximum benefit from the tax code. Let us know how we can assist you? we are truly here to help in any way we can. http://coreperformance.net/contact/

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