Real Estate Taxes Can Be Tough to Understand, But the Agents at Adams Realty Are Here to Help
Selling your home in mid-Missouri can be an exciting step, whether you’re moving to a new property, downsizing, or relocating. Along with preparing your home for the market, it’s important to understand what selling your home could mean for your taxes. While not every home sale results in a tax bill, several factors can affect what you may owe.
Will you pay taxes after selling a home in central Missouri?
One of the most important tax considerations is your capital gain. This is generally the difference between your home’s adjusted basis and the amount you receive from the sale after certain selling expenses.
Fortunately, many homeowners may qualify for the federal home sale capital gains exclusion. If you have owned and lived in the property as your primary residence for at least two of the five years before the sale, you may be able to exclude up to $250,000 of gain if single or $500,000 if married filing jointly, assuming you meet the other IRS requirements.
Keep track of your mid-Missouri home’s cost basis
Your cost basis isn't always simply what you originally paid for the home. Certain improvements may increase your basis, potentially reducing the amount of taxable gain. Keep records of qualifying improvements, such as:
- Major renovations or additions
- New roofing or significant exterior improvements
- Updated kitchens or bathrooms
- Certain improvements that add value or extend the home's useful life
Routine repairs and maintenance generally don't increase your tax basis.
Consider your selling expenses for a home in Centralia, MO
Certain costs associated with selling your home may also affect your taxable gain. Depending on the circumstances, expenses such as real estate commissions, legal fees, and other qualifying closing costs may be taken into account when calculating the gain.
What about Missouri state taxes?
Federal and Missouri tax rules can differ, so it's important to consider both when planning for your home sale. Your individual tax situation may also depend on factors such as how long you've owned the property, whether it was your primary residence, and whether you have previously used the home for rental or investment purposes.
Because tax rules can be complicated, consulting a qualified tax professional before or after your sale can help you understand your specific obligations.
Let Adams Realty Help You Navigate Every Part of Your Home Sale in the Centralia, MO Area
At Adams Realty, we understand that selling a home involves more than putting a property on the market. From preparing your home to helping you understand the selling process, our team is here to make your mid-Missouri home sale as straightforward as possible.
