Dear Mr. Feichthaler:

Well, it is tax time, and I am wondering how to handle this situation. My husband and I sold our home in November in Cape Coral, where we lived for 22 years, and moved into a condominium. At the closing, we were given a 1099 form showing the total sales price of $340,000. We paid about $200,000 for it in 1998. Will the IRS be looking for tax on the $140,000 profit?

-Jamie N.

Dear Jamie:

First, the closing agent properly provided the 1099 form to you, which is require to show the gross sales price of the property. Every sales transaction is reported to the IRS. However, there is very good news for you: you should not need to pay any income tax on this sale! If you used the home 2 out of the last 5 years as your primary residence, you are entitled up to $250,000 of gain at no tax. The amount is even higher for spouses who file taxes jointly — they can exclude up to $500,000 in gains. So, you will not have an income tax obligation, although you are obligated to report the sale. I recommend utilizing a qualified CPA to ensure your taxes are filed properly, it is not worth taking a chance on appearing on the IRS radar.

As a footnote, if you moved into the new condominium prior to Jan. 1, 2020, be sure to apply for “Save Our Homes” homestead portability at www.leepa.org, prior to March 1. You were in your previous home for a long time, making it likely you had significant property tax savings from Save Our Homes. No income taxes and lower property taxes would be a great start to 2020.

Eric P. Feichthaler has lived in Cape Coral for over 30 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Historical Museum, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 18 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator.

Mr. Feichthaler can be reached at eric@capecoralattorney.com, or (239) 542-4733.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.