Illinois tax deductions home sale

Maximizing Returns: Tax Deductions for Home Sellers in Illinois

Selling your home in Illinois can have significant tax implications, but understanding the available deductions can help you maximize your returns. In this guide, we’ll explore the tax deductions available to home sellers in Illinois, empowering you to make informed financial decisions and optimize your tax savings.

1. Capital Gains Exclusion

One of the most significant tax benefits for home sellers in Illinois is the capital gains exclusion. Under current tax law, individuals can exclude up to $250,000 in capital gains from the sale of their primary residence ($500,000 for married couples filing jointly) if certain criteria are met. To qualify for the exclusion, you must have owned and used the home as your primary residence for at least two of the five years preceding the sale.

2. Selling Costs

Many of the expenses incurred during the sale of your home in Illinois can be deducted from your taxable capital gains. These selling costs may include real estate agent commissions, attorney fees, title insurance, escrow fees, and advertising expenses. Keeping thorough records of these expenses can help you maximize your deductions and reduce your taxable income from the sale.

3. Home Improvements and Repairs

Certain home improvements and repairs made within 90 days of the sale may qualify as deductible selling costs in Illinois. Qualifying expenses may include renovations, repairs, and upgrades that were made specifically to enhance the marketability of the property. However, routine maintenance and repairs performed as part of regular upkeep typically do not qualify as deductible expenses.

4. Property Taxes and Mortgage Interest

Property taxes and mortgage interest paid during the time you owned the home can also be deducted from your taxable income. In Illinois, property taxes are typically paid in arrears, meaning you may have prepaid taxes that can be deducted in the year of sale. Similarly, mortgage interest paid up to the date of sale can also be deducted, providing additional tax savings for home sellers.

5. Moving Expenses

If you’re selling your Illinois home and relocating for work-related reasons, you may be eligible to deduct certain moving expenses on your federal tax return. Qualifying expenses may include transportation, storage, and lodging costs incurred during the move. To qualify, your new workplace must be at least 50 miles farther from your old home than your old workplace was.

Consult with a Tax Professional

While these deductions can provide significant tax savings for home sellers in Illinois, tax laws are complex and subject to change. It’s essential to consult with a qualified tax professional or accountant to ensure you’re maximizing your deductions and complying with all applicable tax regulations. With expert guidance, you can navigate the tax implications of selling your Illinois home with confidence and peace of mind.

Ready to explore your options and unlock the fast cash potential of your Illinois property? Contact Grandview Homes today! Our experienced professionals are here to answer your questions, provide a free, no-obligation cash offer, and guide you through a smooth and transparent cash sale process. 

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