Keyword Analysis & Research: selling house 1040

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Frequently Asked Questions

Who pays the sales tax when a house is sold?

This sales tax is assessed to the seller, and paid when he files his Form 1040. Because traditional sales taxes usually exempt real property sales, some states, such as Washington, or municipalities enacted an excise tax on the sale of real estate.

Do I need to pay tax on selling a home?

If part or all of your gain on the sale of your residence is taxable, you'll pay tax on the gain at capital gain tax rates. These rates are lower than personal income tax rates provided that you owned the home for more than one year. If you owned the home for less than one year, you pay tax on your gain at your personal ordinary income tax rate.

How does Selling Your House affect your taxes?

Any gain (profit) on the sale of your home may be subject to the capital gains tax. Your gain (or loss) is determined by subtracting your cost basis from your selling price, less selling expenses. A loss on the sale of your home is not deductible on your return.

Can I deduct excise tax paid on selling a house?

Generally speaking, true excise taxes cannot be deducted on your personal return. This would include things like fuel tax and excise taxes paid to your city or state when you sell your home. Excise taxes that are necessary to conduct business can usually be deducted as a business expense.

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