Selling Your House FAQ

Questions:

• Should I sell my house now?
• Do I need a real estate agent or attorney to sell my house?
• Will I owe taxes when I sell my house?
• When will I meet my prospective home buyers?
• What will I need to leave behind in the house after it's sold?
• How much should I fix up the house before selling it?

Answer:

Will I owe taxes when I sell my house?

Thanks to the Taxpayer Relief Act of 1997, many home sellers no longer owe taxes on the gain they make when they sell their houses. Married taxpayers who file jointly now get to keep, tax-free, up to $500,000 in gain on the sale of their home, as long as they lived in it for two of the prior five years. Single folks and married taxpayers who file separately get to keep up to $250,000. 

If you're lucky enough that your profits on the house exceed this amount, don't panic quite yet -- not all of it may be taxable gain, for example if you invested in home improvements. (See Nolo's article Tax Breaks for Selling Your Home.)