Many people who sell their homes do so at a substantial profit – especially if they have owned the home for many years. In most cases, the IRS expects you to pay taxes on any profits you realise.
But selling your own home may be treated differently. Here are four common questions regarding how selling your home may affect your tax return:
- What is an “exclusion of gain” and how does it affect my taxes?
The “exclusion of gain” rule allows you to exclude, or leave off, part or all of the profits you received from the sale of your home. To use this rule, you’ll need to meet the IRS’s eligibility test. For example, you will need to meet legal requirements concerning the ownership of the home and its uses. You’ll also need to show that you owned and used the home as your primary home for at least 2 of the 5 years before you sold it.
- What is the limit of the exclusion?
If you qualify for an exclusion of gain, you’ll be able to exclude up to $250,000 per person from your taxes ($500,000 for two people who file jointly). In other words, you won’t have to pay the Net Investment Income Tax on any amount you can exclude.
- I’m not sure I meet the “exclusion of gain” Are there any exceptions?
Certain exceptions exist for persons with disabilities, certain military servicemembers, and certain people who work for the government or the Peace Corps. IRS Publication 523 provides more details, or you can talk to an experienced lawyer. But watch out – you can only apply the exclusion once every two years in most cases.
- Am I always obligated to report the sale?
You must report the sale on your taxes if you have to pay tax on part or all of the gain. If you choose not to claim the exclusion at all, you’ll also have to report the sale. But if the entire gain is less than $250,000 (or $500,000 on a joint return), so that you owe no taxes, you may not need to report the gain. Talk to your lawyer or accountant for guidance.
At Jones Obenchain, we’ve been representing local, regional, and national insurers and the folks they insure for over 100 years. The work we do for them runs the gamut from defending personal-injury claims, to litigating employment-discrimination claims, to prosecuting and defending coverage actions and errors-and-omissions lawsuits.
All of this litigation gets us into court…a lot. In 2011 Jones Obenchain tried more civil jury trials in Indiana than all but one other firm.*
And though litigation is an adversarial process, our peers consistently rank us among the best at what we do. So do our clients, if the feedback they’ve given us on legal sites such as AVVO and Martindale-Hubbell are any indication.
But as essential as courtroom skills are to a litigation practice, they’re worthless if our clients and the courts don’t want to read what we have to say. Let’s face it: there’s a lot of writing in a litigation practice and most legal writing is a chore to get through. We read it because we have to, not because we want to.
So our litigators emphasize writing in plain English and using cutting-edge technology in the documents we prepare to make them a pleasure to read. What does that mean, exactly? It’s not unusual to see photographs, hyperlinks, and video embedded in our briefs and motions. These add visual interest to the text and corroborate the arguments without sending readers to riffle through mounds of exhibits.
Not only are plainly written, visually appealing documents easier for clients to read and understand, they help persuade mediators and judges about the merits of our clients’ position. That means we’re often able to bring cases to a successful resolution before we ever step foot in a courtroom.
*Source: 2011 Indiana Jury Verdict Reporter.
Today we celebrate National Tell a Joke Day. We hope your day is filled with chuckles and laughs. Enjoy this day by just telling some jokes. Do it in person, or pass along a few humorous emails. Just remember, in order to “tell a joke,” someone has to be present to “listen to a joke.” So, are you ready? Knock knock……
Summer is winding down and we can hear the ringing of the school bells in the not-too-distant future. The hunt for school clothes and gathering of school supplies has begun. This time is always a bittersweet one for parents: we are glad for school to begin again, but sad knowing our children are all one step closer to growing up. Whether your child is just beginning their educational journey, or is an old pro at this back-to-school business, helpful hints are always welcome. Visit: https://healthychildren.org/English/news/Pages/Back-to-School-Tips.aspx for some ideas to benefit parents and students alike.
Personal Injury & Wrongful Death
Plaintiff and Defense
Automobile and Industrial Accidents
When you’ve been injured, your focus should be on getting better. But that can be difficult as medical bills mount and insurance companies call with offers to settle. The last thing you want to deal with as you recuperate are medical professionals and insurance companies.
But you don’t have to go it alone. For over 100 years, Jones Obenchain’s lawyers have represented individuals who have been injured through someone else’s negligence—whether in a car accident, slip-and-fall incident, or by a defective product. And because we represent not just the injured, but also those accused of negligently injuring someone else, we’ve developed the expertise necessary to assess injury claims from every angle.
And the work we do for injured people gets us into court—a lot. Unlike many injury lawyers who never see the inside of a courtroom, we actually try cases. In fact, in 2011 Jones Obenchain tried more civil jury trials than all but one other firm in Indiana according to the Indiana Jury Verdict Reporter.
But our lawyers are skilled in alternative-dispute resolution too. We regularly participate in arbitration and mediation which reduces the cost of litigation and gets cases resolved more quickly than a trial. So, if you’ve been injured and need help, call Jones Obenchain, LLP.
Millions of taxpayers receive a letter or notice from the IRS each year for a variety of reasons. Many of those recipients may be alarmed and find responding to the letter a bit overwhelming. The IRS has compiled a “how to” list to help ease the anxiety of those recipients. Visit https://www.irs.gov/uac/newsroom/tips-on-how-to-handle-an-irs-letter-or-notice for more information.
Kent Rowe, III has been with Jones Obenchain since October 2016 and brings with him 30+ years of legal experience. Some of Kent’ s interests outside the office include racquetball, weight lifting/fitness, and microwave cooking. To get to know Kent a little better and find out how he can assist you or your business visit: http://jonesobenchain.com/team-member/r-kent-rowe-iii/
The US Citizenship and Immigration Services has released a revised I-9 Employment Eligibility Verification form. The latest version includes changes to the instructions and the acceptable Employment Authorization documentation on List C. Employers may use the old form (dated 11/14/16) until September 17, 2017, but must begin using the new version on September 18, 2017. No changes were made to the storage and retention rules.
National Mutt Day is a holiday that falls on July 31st and December 2nd and celebrates mixed-breed dogs. This day also serves as a reminder that there are millions of mixed-breed dogs in shelters all over the United States just waiting for a family to take them home and love them. The absolute best way to celebrate National Mutt Day is to help the mixed breeds dogs living in the world today. You can give shelters that house them money or volunteer your time, or even better, you can adopt one as a pet.
Contrary to popular belief, business disputes—not personal-injury claims—make up the bulk of non-domestic-relations civil court filings in the United States. That’s right: businesses suing to enforce contractual obligations are what keep our courts busy.
Litigation is often a last resort, but when it can’t be avoided, we work with our commercial clients to manage litigation risks and find the most cost-effective approach to resolving business disputes. We aim to get to the bottom of the matter, avoid lengthy litigation, minimize business disruption, and conclude the case creatively and expeditiously.
Our litigators have decades of experience handling complex, multi-party litigation. We also represent trustees, receivers, creditors, and debtors in major insolvency and restructuring matters.
When a promising deal goes south, or when an employee strikes off on their own to set up a competing enterprise, see why business owners in northwest Indiana and southwest Michigan have looked to Jones Obenchain, LLP for help for over 100 years.