After you have sold your home, you still have several financial transactions to deal with. One of them will be filing your taxes the following year. If you sell a home early in a year, you might not need these documents for another 14 months. However, you will need them. Check out this list of some of the documents you need to do your taxes after selling a home. If you are just starting the process of buying or selling a home, contact Berkshire Hathaway HomeServices at (310) 373-0021 for help.
The 1099S form is used to report your capital gains. If you do not qualify for a capital gains tax exclusion, then your home sale is going to be reported to the Internal Revenue Service through a 1099S form. You should get this in the mail, and it will be required when you file your taxes. On the other hand, if you do not have to pay capital gains tax on the sale, then you might not receive this form. If you are not sure, talk to your real estate agent or closing attorney.
If you had a mortgage on your home and you paid mortgage interest, then you will need a 1098. This shows how much interest you have paid throughout the year. It’s actually often to your advantage because if you do not qualify for the full exclusion due to the interest you have paid on your home, they can be added to the cost basis. In short, this can lower your overall tax burden.
Remember that even if your property taxes are paid through escrow or via your mortgage, you are still paying those taxes.
Also known as the settlement statement, this form is technically called the HUD-1. Sometimes it is referred to as the closing disclosure statement. No matter what it is called, it will list all the costs incurred when the home was sold. It will have information about the application of property taxes, how much you paid the broker, and is essentially a receipt of your home sale.
Documents That Confirm Your Cost Basis
If you have records or receipts that prove your cost basis, then you should take those to your accountant as well. This includes things like receipts for home renovations and invoices for various improvements. These documents can help you lower your home sale tax liability. Just be careful that you do not include anything you do not have receipts for.
At Berkshire Hathaway HomeServices, we are here to help you buy or sell a home. We are here to help you through the real estate process. Contact us now at (310) 373-0021 for help and to learn more about our unique process.