Blog > Key Tax Deductions When Selling a Home in Long Beach
Are you selling your home in Long Beach and wondering what is tax deductible? Many homeowners are curious about the tax implications of selling their property, particularly when it comes to deductions that can lower their tax liability. In this comprehensive guide, we’ll break down the common deductions you may be eligible for, and why working with an experienced team like The Phillip Group, led by Marvin Phillip, can make all the difference in maximizing your sale.
Understanding Tax Deductions When Selling a Home
Selling a home can be a complex process, especially when it comes to understanding taxes. However, by knowing what expenses are tax deductible, you can potentially save thousands of dollars. As you prepare to sell your home in Long Beach, keep in mind that there are specific costs you may be able to deduct, which can help lower your taxable income. While we recommend consulting a tax professional for specific advice, here are some common tax deductions available to home sellers.
Key Tax Deductions When Selling a Home in Long Beach
1. Home Improvement Costs
Did you make any significant improvements to your home before selling? If so, the costs associated with these upgrades may be tax deductible. Home improvements that increase the value of your property, such as kitchen renovations, bathroom upgrades, or adding a new roof, can be added to the basis (original purchase price) of your home. Increasing the basis reduces your capital gains, thus lowering the taxes you owe when selling.
2. Selling Costs
Many of the expenses directly tied to the sale of your home in Long Beach are deductible. These costs can include:
- Real estate agent commissions
- Legal fees
- Escrow fees
- Advertising or marketing costs
- Staging fees
When you work with The Phillip Group, we ensure you understand these costs upfront so that you can deduct them from your sale profits, helping to minimize your tax burden.
3. Mortgage Interest and Property Taxes
If you're still paying off your mortgage, the interest you’ve paid up to the date of sale may be deductible. Additionally, property taxes paid throughout the year, including up to the point of sale, can also be deducted. These deductions are important, especially for those selling mid-year, as they can help reduce your taxable income.
4. Capital Loss Carryover
If you’ve previously sold an investment property at a loss, you may be able to deduct this loss when selling your Long Beach home. This is particularly applicable if the property being sold was used as a rental or investment, but it’s best to speak with a tax professional for detailed guidance on how this deduction can apply to your specific situation.
5. Moving Expenses (For Qualified Relocations)
If your home sale is directly related to a job relocation, certain moving expenses may be tax deductible. To qualify, the move must meet the distance and time requirements set by the IRS. Although the Tax Cuts and Jobs Act has limited this deduction for most homeowners, it may still apply in some cases, especially for military personnel.
The Capital Gains Tax Exclusion: What You Need to Know
One of the most significant tax breaks available when selling your primary residence is the capital gains tax exclusion. If you’ve lived in your Long Beach home for at least two of the last five years before selling, you may be eligible to exclude up to $250,000 (or $500,000 for married couples filing jointly) of your capital gains from taxes.
How Does This Work?
For example, if you purchased your Long Beach home for $500,000 and sold it for $800,000, your capital gain would be $300,000. If you're single, you could exclude $250,000 of this gain from taxation, meaning you'd only owe taxes on the remaining $50,000.
The capital gains exclusion is particularly beneficial for Long Beach homeowners, as property values in the area have appreciated significantly in recent years. This exclusion can help ensure that you keep more of your profits from the sale.
Why Choose The Phillip Group for Your Long Beach Home Sale?
Selling a home involves much more than putting it on the market and hoping for the best. The process can be complex, especially when you start factoring in taxes and deductions. This is where The Phillip Group, led by Marvin Phillip, shines. With 20 years of experience in the Long Beach real estate market, we provide expert guidance to help you navigate every aspect of the home-selling process.
Our team will:
- Help you understand the potential tax implications of your sale
- Provide a detailed breakdown of selling costs so you know what’s deductible
- Offer personalized strategies to maximize your profit while ensuring compliance with all legal and ethical guidelines
When you choose The Phillip Group, you’re choosing a team that puts your needs first. Whether you’re selling a home in Lakewood Village, The Plaza, South of Conant, Los Altos, Cal Heights, Belmont Shore, Bixby Knolls, or Downtown Long Beach, we have the local knowledge and expertise to ensure a successful transaction.
Important Considerations: Consult a Tax Professional
While this blog provides general information on what is tax deductible when selling a home, every seller’s situation is unique. Tax laws can be complex, and there may be additional deductions or restrictions based on your circumstances. We highly recommend consulting a tax professional to ensure you’re taking full advantage of all available deductions.
At The Phillip Group, we work closely with industry professionals to ensure our clients have access to the best advice possible. By partnering with a qualified tax expert, you can rest assured that your tax obligations are fully understood and managed.
Ready to Sell Your Long Beach Home? Contact The Phillip Group Today!
If you’re preparing to sell your home in Long Beach, now is the perfect time to reach out to The Phillip Group. We are here to guide you through the process, from understanding tax deductions to maximizing your sale price. With our expertise and local knowledge, we’ll ensure a smooth and profitable transaction.
Contact The Phillip Group today at (562) 207-8200 or visit our website at www.thephillipgroup.com to get started. Let us help you sell your Long Beach home for the best possible price, while making sure you understand all the tax implications along the way.