If you’re buying or selling a home, you should know how to determine your basis. The law allows an exclusion from income for all or part of the gain realized on your home sale. The general exclusion limit is $250,000 ($500,000 for married taxpayers). You want your basis to be as high as possible in order to avoid or reduce the tax you may owe when you sell. Improvements that add to your home’s basis include: a room addition, finishing the basement, a fence, a central air conditioning system, flooring, a new roof and driveway paving. Repairs, rather than improvements, aren’t added to a property’s basis. Repairs include painting, fixing gutters and repairing leaks. Contact us with questions.
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