Q. I’m selling my home on the installment basis. Does this qualify for the home sale exclusion? S.M., Yardley, Pa.
A. Yes, as long as you meet the requirements for the exclusion (i.e., you’ve owned and used the home as your principal residence for at least three of the five previous years). The maximum exclusion is $250,000 for single filers and $500,000 for joint filers. You still must pay tax on any profit above the applicable amount, but tax is due only as payments are received. Thus, you can defer tax on a high-priced sale.
Tip: To qualify for installment sale treatment, payments must be received over at least two years.
- Small Business Tax Deduction Strategies No matches