What Happens when You Sell Your House for a Profit?

There is a reason why so many people view real estate as an investment – it tends to increase in value over time. That means that the Rockport homes for sale now could be worth much more 10, 20, or 30 years in the future. While you should not count on your home to make you money, it is entirely possible that you could generate a profit when the time comes to sell it. So, what can you expect if you sell your house for more than you paid for it?

Payable After Expenses

When you sell your house and the balance of loans against the property are paid in full, you will still have expenses to pay. These include your portion of any closing costs, attorney bills, and real estate agent fees, as well as payments owed for real estate taxes in arrears. You will then receive the entire remaining profit after all expenses are paid.

You may be able to determine the means by which you receive payment. Since checks can take several days to clear your bank, you may receive access to your money faster via electronic funds transfer directly into your account.

Tax Obligations

Although most capital gains and income are taxable in the U.S., there are flexible tax rules for real estate profits. Generally, you do not have to report real estate gains so long as you used and lived in the property you sold for at least two of the previous five years. Keep in mind that only $250,000 of your profits are non-taxable. In any case, it is important that you speak with an accountant or tax attorney before re-appropriating the funds you receive from your home sale.