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Small Business Tax Q&A: March ’18

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in Small Business Tax

Divide up home sale proceeds

Q. I’m selling my farmhouse, which is my principal residence, attached to adjoining farmland. Can I exclude tax on the entire gain? T.M.B., via email

A. No. We’ll assume you qualify for the home sale exclusion for the sale of a principal residence for at least two out of the last five years. The maximum exclusion is $250,000 for single filers and $500,000 for joint filers. But this tax break only applies to the portion of the home used as your principal residence, not to any adjacent land used for farming or another business purpose. So you’ll have to attribute part of the gain to this non-personal portion. All of that gain will be taxed at capital gains rates.

Tip: A provision revising the home sale exclusion was removed from the final version of the new tax law.

Find tax shelter for mortgage interest

Q. We improved our home in 2017. Can we still deduct the interest on our home equity...(register to read more)

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