In this episode, Dr. Friday explains the tax consequences of selling your home, including home exclusions, rental conversions, and potential deductions.
Transcript:
G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.
Selling your home. So nowadays, it’s not quite as simple. Most people live in their home. As long as you’ve lived in it two out of the last five years, you can qualify for a home exclusion.
But a lot of times, people will turn those homes into rentals, or they’ll rent part of the house out and live in the other. And when they’re doing that, they’re appreciating or turning that part of the home into an investment. And in doing so, there can be pros and cons.
One of the pros is that we can’t take a loss if you happen to sell your primary home at a negative dollar amount. But if it’s a business, if it’s a rental, we can take that loss. So it’s important to understand if you’re making money or losing money. If you need help, just go to drfriday.com.
You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.