Selling your mom's house in Memphis involves both emotional and financial considerations 🏡, especially regarding capital gains tax. This infographic breaks down the essential information you need to navigate the process smartly and keep more of your profit.
📌 Key Highlights:
💰 What Are Capital Gains?
Profit from selling the house above its original purchase price.
📑 Tax Implications:
- Inherited Properties: Qualify for a "step-up in basis," resetting the value to market price at inheritance, reducing taxable gain.
- Primary Residence Exclusion: Exclude up to $250,000 (single) or $500,000 (married) of profit if you lived there 2 of the last 5 years.
- Tennessee State Tax: No state capital gains tax! Only federal taxes apply.
📊 Deductions & Strategies:
- Subtract selling costs (realtor fees, closing costs) and home improvements from taxable gain.
- Consider a 1031 Exchange to defer taxes by reinvesting proceeds into another property.
⚠️ Avoid Common Mistakes:
Don’t forget the step-up basis for inherited homes, track selling expenses, and understand rental vs. personal property rules.
💡 Why This Matters:
With proper planning, you can significantly reduce your tax burden and maximize proceeds from the sale. Always consult a tax professional for personalized advice!
Tags:
#CapitalGainsTax #MemphisRealEstate #InheritedProperty #SellingYourHome #TaxTips #1031Exchange #StepUpInBasis #MemphisHomes #RealEstateInvesting #TennesseeTaxes
