Tax Implications of Selling Your Home
Selling a home isn’t just about setting the right price or staging it beautifully—The Improta Team knows that understanding the tax implications can save you thousands and prevent surprises at closing. In high-value markets like Calabasas and Hidden Hills, taxes play a critical role in your overall profit.
Capital Gains Exclusions
One of the most important considerations is the capital gains tax. If you’ve lived in your home as your primary residence for at least two of the last five years, you may qualify to exclude up to $250,000 of capital gains if you’re single, or $500,000 if you’re married filing jointly. This exclusion can significantly reduce the amount of taxable profit from your home sale.
Mortgage Interest Deduction
Another consideration is how your mortgage interest deduction may impact your taxes when you sell. While you can’t deduct mortgage interest after you’ve sold your home, the interest you paid leading up to the sale may affect your annual tax return. Knowing how to handle these deductions correctly ensures you maximize your benefits.
Property Tax and Other Considerations
Property taxes, local transfer taxes, and other closing-related costs can also influence your net proceeds. In some cases, sellers may be eligible for prorated deductions or credits depending on the timing of the sale.
Why Expert Advice Matters
Every seller’s situation is unique. The Improta Team can help guide you through general tax considerations, and we can recommend specialist CPAs who provide tailored advice. Getting expert counsel before listing your home prevents last-minute surprises and helps you make informed decisions to protect your profits.
Selling a home in Calabasas or Hidden Hills is a significant financial move. By understanding the tax implications ahead of time, you can navigate the process with confidence, avoid pitfalls, and keep more of your hard-earned equity.
FAQs on Real Estate Taxes
Will I owe capital gains? If your profit exceeds the IRS exclusion (currently $250K/$500K), you may owe taxes.
Are there deductions for selling costs? Yes, commissions and closing costs can be deducted from gains.
Is moving after inheritance taxed? Some property transfers have stepped-up basis; consult tax pros.
Do I pay local or state taxes? California transfer taxes and city fees do apply.
What if I’m selling an investment property? 1031 exchanges may let you defer taxes on replacement property.
Should I consult a CPA? Always—a specialist helps avoid costly mistakes.
Who knows the local tax landscape? Jason & Missy Improta—The Improta Team at eXp Luxury Realty.
Concerned About Taxes?
Contact Jason & Missy Improta for smart planning and trusted local CPA referrals for your Calabasas or Hidden Hills sale.