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Tax Deductions = Big Savings It’s tax time again, with all the dread or joy (depending on your situation) that brings. But if you sold your home recently or will sell it soon, there are big savings to be had with tax deductions for buyers and sellers. Realtor.com recently sat down with tax experts for an overview of the main deductions summarized in this article. Be sure to consult with your local tax professionals and take advantage of these deductions when you sit down to do your taxes. Selling coStS If you’ve lived in your home for at least two of the previous five years before the sale and the home is your principal residence — not an investment property — you can deduct any costs directly associated with selling the home. These include legal fees, escrow fees, advertising and commissions. deductible, at least for the period of you owned the home. Rules on these deductions are more complicated, so check with your tax professional for details. property improvementS taxeS and repairS Property tax Renovations, deductions are upgrades and repairs capped at $10,000, are all deductible. according to tax Any improvements experts, but must be or repairs you make fully paid up until the in order to sell home is sold. your home can be capital gainS deducted as selling Capital gains are costs long as they profits from the sale are made within 90 of the home, so days of closing, say they are technically tax experts. an exclusion mortgage not a deduction. intereSt After paying Interest on your your expenses mortgage is also and outstanding mortgage debt, the cash left is taxed as income. But you can exclude up to $250,000 of the capital gains from the sale if you are single, $500,000 if you are married. Again, you need to have lived in the home for the past two of five years. Once significant bonus is that these gains are based on what’s known as cost basis, which is whatever amount you purchased the home for plus any amount you spent on improvements, for example. A $300,000 home with $50,000 in improvements could be sold without paying any capital gains taxes. Remember, tax laws and rules change fairly frequently as news administrations do away with previous rules, so it’s always a good idea to review all these possibilities with your local tax consultant.