So, You Want to Sell Your House Yourself in Florida? Let’s Talk About the IRS
By; Robert Urban, FSBO Seller, Fellow Tax Payer, Not a CPA, but knows enough to give decent advice
Ah, Florida. The land of sunshine, a giant mouse park, and suspiciously fast golf carts. You bought your house with big dreams and even bigger ceiling fans-and now it’s time to sell. But instead of hiring a real estate agent, you’ve decided to go rogue. Maverick. Solo mission. You’re putting up the sign yourself. That’s right-you’re doing a FSBO (For Sale By Owner).
Good for you, Captain No-Commission. But before you sail off into the sunset with a pocket full of profit, there’s a little thing we need to chat about.
Taxes.
Yes. That four-letter word in disguise.
1. Capital Gains Tax: The Government Wants a Cut of Your Paradise
✦ The Basics
You bought low, you sold high, and now you’re doing the Dougie in your kitchen. But Uncle Sam’s been watching, and he’s doing the math. This is the same whether you sell traditionally or with a FSBO
If your home appreciated in value (and in Florida, unless it’s haunted or built directly on an alligator preserve, it probably did), you could be looking at capital gains tax.
But wait-before you panic and start mailing cash to the IRS in sandwich bags, there’s some good news:
✦ The Primary Residence Exclusion (aka the “You Live Here, So You’re Cool” Rule)
If you’ve lived in the house for at least 2 out of the last 5 years as your primary residence, and you’re not running a meth lab in the garage, you could qualify for:
- $250,000 exclusion if you’re single
- $500,000 exclusion if you’re married filing jointly
So if you bought the place for $300,000 and sell it for $800,000, and you’re married, you could walk away with the whole $500K gain tax-free.
That’s a lot of Publix subs.
But-if your gain exceeds that exclusion, then congrats, you’re officially rich enough for the IRS to notice you.
2. No Agent, No Shield
Here’s the thing: when you sell your home without an agent, you become the agent. That means you get to keep the commission-yay! But it also means you’re on the hook for every tax form, disclosure, and minor legal technicality-boo!
There’s no one holding your hand through the IRS reporting dance. You better know your numbers, because if you accidentally write “couch money” in the wrong box, they will find you.
3. Transfer Taxes: Florida Says, “Gimme Some, Too”
We Floridians don’t pay a state income tax, which is nice. But that doesn’t mean we escape completely. Florida hits you with a “Documentary Stamp Tax” when you transfer property.
✦ What’s That?
It’s like a goodbye hug from the state. Except instead of affection, it costs 70 cents per $100 of the sale price in most counties. (Miami-Dade does its own weird thing, of course.)
Sell your house for $400,000? You’re paying $2,800 in doc stamps.
So when you write that sweet “I just sold my house!” post on Facebook, maybe include your Venmo.
4. Other Hidden Costs: Because Of Course There Are
- Title Search & Closing Fees – Even if you’re FSBO, someone has to run the paperwork gauntlet.
- Pro-rated Property Taxes – You’ll owe taxes for the part of the year you owned the home.
- Mortgage Payoff Penalties – If you didn’t read the fine print back when you were focused on where to put the tiki bar.
5. Reporting It All: The IRS Wants a Letter
Even if you don’t owe capital gains tax (thanks to that juicy exclusion), you still have to report the sale on your tax return. You’ll get a Form 1099-S from the title company or attorney handling the closing.
Ignore that form and the IRS will assume you’re trying to buy a jet ski with their money. Not recommended.
6. If You Rented It or Used It as a Vacation Home… Well, Buckle Up
If your house doubled as an Airbnb, timeshare, or “my cousin Jerry lived there for free for a year but we called it rent,” then things get messy.
You may have to depreciate part of the property, recapture that depreciation when you sell, and generally navigate a tax maze built by caffeinated accountants in a windowless bunker.
Pro Tips
Keep your receipts. Not just for the IRS, but because there’s always that one buyer who wants to know exactly when you replaced the HVAC.
- Talk to a CPA. Not your cousin who “used to do taxes at Walmart.” A real one. One that doesn’t blink when you say “Doc Stamp.”
- Don’t underprice yourself out of fear. Just because you’re FSBO doesn’t mean you should panic and accept payment in cash, a rusty ATV, and a hug. Know your worth. And also the value of your property.
7. Thinking Ahead: Create an LLC and Get Fancy With It
Now listen, I’m not saying you need to start an empire here, but if you’re selling a property FSBO and you’re treating this like more than just a lemonade stand-level operation-you might want to consider forming an LLC.
Why?
Because expenses are real, and the IRS loves paperwork almost as much as it loves penalties.
Here’s the play:
- You create an LLC (Got to Sunbiz.org for more details)
- You funnel all your FSBO-related expenses through it: marketing costs, signs, photography, website development if applicable, open house snacks (but maybe not the bacon-wrapped shrimp-you’ll lose that argument).
- And when it’s tax time, you’ve got clean books, smart deductions, and maybe-just maybe-you look a little more like a savvy investor and a little less like a guy trying to Venmo a notary.
Now, does this make sense for everyone? No. But if you’re selling more than one property, or you’re turning this FSBO thing into a side hustle or hobby-it could protect you legally and save you on taxes.
Plus, people take you way more seriously when you hand them a business card with “Managing Member” under your name instead of a post-it with a hastily scribbled “Tom. Guy Selling His House. And your number.
You’re Not Just Selling a House-You’re Taking the Wheel
Look, going FSBO isn’t for the faint of heart. It’s for the bold. The scrappy. The caffeine-fueled renegades who say, “I can negotiate my own deal, fix that leaky faucet, and Google what a contingency clause is-all before lunch.”
You’ve chosen to skip the suits, dodge the commissions, and steer this whole wild ride yourself. And that’s something to be proud of.
Sure, it’s going to take more effort. You’ll probably stay up too late reading about escrow, you might argue with your printer about ink prices, and at some point, you will definitely Google “What is a seller disclosure and why does it feel like a threat?”
You’ll also learn more than you ever thought possible about real estate, taxes, negotiation, and the art of ad writing. You’ll come out of this smarter, savvier, and possibly with a new side hustle you didn’t expect. (Real estate mogul? Don’t mind if you do.)
So here’s to you, FSBO hero.
You’re not just selling a house.
You’re taking control.
You’re keeping your equity.
You’re flexing every adult muscle you have-while sipping coffee from a mug that says “DIY or Die Trying.”
And when you finally close that deal, and the check hits your account without a 6% bite taken out?
Crack open a cold beverage of your choice to hydrate in the Florida sun, call your CPA, and toast to the fact that you did it your way.
FSBO isn’t just a transaction. It’s a declaration: I got this.
So, yeah- You got this.
While HOYONOW.com won’t handle your tax forms or generate your 1099 after the sale (that’s between you and your CPA, and probably several emails), it will make almost every other part of the FSBO process easier, faster, and a whole lot less migraine-inducing. If you’re serious about selling smart, it’s worth a look.
Sincerely,
Rob Urban
Not the IRS’s biggest fan-because I believe in fair play, not fiscal squeeze plays-but I am a huge fan of you: the savvy seller out there maximizing every dollar like a boss. Keep your equity. Keep your power. Keep going.