Moving Day Checklist – For Your Taxes

Whether you’re taking advantage of currently low housing prices to move up the property ladder, relocating for a job or downsizing to save on housing costs, there are many tax considerations worth your attention. This tax planning checklist provides a starting point:

√ Home sale gain exclusion. You generally can exclude from your taxable income up to $250,000 ($500,000 for joint filers) of gain on your home if you meet certain tests. (Talk with your tax advisor for more information.)

√ Losses on the sale of your home. These generally aren’t deductible. But if part of your home was rented or used exclusively for business, the loss attributable to that portion may be deductible.

√ Deductibility of moving expenses. These expenses generally are deductible only if you’re moving because of a job location change. Your new workplace must be at least 50 miles further from your old home than your old workplace was. You also must satisfy a “time” test.

√ Mortgage interest deduction limit. If you’re financing more than $1 million for your new home or you also hold a mortgage on another home, keep this limit in mind: You generally can deduct interest on up to a combined total of only $1.1 million of mortgage debt incurred to purchase, build or improve your primary home and a second home.

√ Tax consequences of moving to a new state. You’ll need to consider how your new state’s income, property, sales and estate taxes compare to your old state’s. And if you’re retired, see if the new state offers tax breaks for pension payments, retirement plan distributions and Social Security payments.

Be sure to discuss these considerations with your tax advisor, because additional limits and exceptions might apply.

This material is generic in nature. Before relying on the material in any important matter, users should note date of publication and carefully evaluate its accuracy, currency, completeness, and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances.