When you sell your home, you may incur a taxable gain: one in excess of the exclusion available ($250K, and $500K). In the year you sell, don't wait around until the 10th of the following April during the busy tax season to call your tax preparer and inquire as to what he or she needs to figure your gain. In many cases, it also makes sense to complete this task immediately and early on in the year of the sale if it occurs before March 31st because the tax preparer may need the sale information to discuss its impact on the need for estimated taxes that may become due as a result.
To do this, take a few minutes or longer to compile a list of the 'improvements and betterments" made to the property during the time you owned it. These amounts are not to be confused with "simple repairs" which generally speaking aren't to be considered. Supply this list along with the original cost to purchase it and the date it was purchased. Make sure the preparer is aware of the length of time it was owned and the length of time it was occupied as your principal home.
Make sure your tax preparer is provided a copy of the two-page closing document when the home was sold so that he or she can properly pick up the closing costs, credits, and the selling price that was reported to the IRS. I personally believe in forcing this information to be included in a return because the only sale information the IRS sees without it is the selling price. Ouch!!!
Also remember to supply him or her with the costs you incurred to get the house ready to sell. These costs as often separated from those costs you list in the historical summary.
