Real Estate Investment

Homeowners get a big tax break when they sell: A capital gains tax exclusion

Homeowners get a big tax break when they sell: A capital gains tax exclusion

Homeowners already know the many tax breaks that Uncle Sam offers, most notably mortgage interest and property tax deductions. Well, he also has good tax news for home sellers: Most of them won't owe the Internal Revenue Service a single dime.

When you sell your primary residence, you can make up to $250,000 in profit if you're a single owner, twice that if you're married, and not owe any capital gains taxes.

"Most people are not going to have a tax obligation unless their gain is huge," says Robert Trinz, senior analyst with Thomson Reuters Checkpoint.

Here's why that buyer may not plan to live in your home

Here's why that buyer may not plan to live in your home

One out of every four homes sold in the Chicago area in 2016 went to buyers who don't plan to live in the property, a phenomenon that sneaked up on almost everybody. 

Just over 26 percent of the homes sold in 2016 in the metropolitan area went to small investors, according to figures Attom Data Solutions compiled exclusively for Crain's. The figure is up from 10 percent a decade earlier. The buyers include those who plan to rent the properties to tenants, rehab them for resale or use them as second homes.