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With the New Year underway, many are already thinking about the upcoming tax season. For new homeowners or those who have recently sold a home for the first time, you may be wondering how this tax season will differ from the previous years. Below, Michael Litzner, Broker of Century 21 American Homes walks us through what you can and cannot deduct. Capital gains: "If you sold your primary residence, you're in luck," says Litzner. "You may be able to exclude up to $250,000 of gain, and $500,000 for married couples, from your federal tax return." What is your gain? Your gain is defined as your home's selling price, minus deductible closing costs, minus your basis-the original purchase price of the home, plus improvements, less any depreciation. However, there are a few rules: your home must have been owned by you and used as your main home for a period of at least two out of the five years prior to its sale. You also must not have excluded gain on another home sold during...
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