In June’s installment of Tax Tips, Lauren Nolin and Kevin Hickman tackle the question, In Nashville’s hot real estate market, I have sold my old home and purchased a new one. What information should I keep for my 2016 tax filing? Click here for video.
In Nashville’s hot real estate market, I have sold my old home and purchased a new one. What information should I keep from my 2016 tax filing?
Nashville’s real estate market is good and many customers are selling and buying new homes. The first documents you need to keep are your settlement statements.
The settlement statement is an important document because it reconciles your purchase price or your selling price to the actual cash disbursed or received at closing.
There also are some hidden tax items in the settlement statement. These include your pro-rated property taxes as well as any points or origination fees that you paid.
These items may be deductible.
Keep in mind, too, that if in the past you had refinanced the home you sold and paid points on the refinance, you will be able to deduct any points that had not been amortized at the time of the sale this year.
Also, when you sell your home, your old mortgage may have had an escrow account. The balance in your escrow account will be refunded by your old mortgage company after the sale. This refund should not be taxable.
Providing us with the settlement statements will be essential when we begin the preparation process of your return next Spring.