When you sell your
home, the IRS allows you to exclude gain on the sale from taxable income, up to $250,000 ($500,000 Married Filing Jointly and you both meet the use requirement).
You can claim the exclusion if you own and use the
home as your main
home for at least 2 years during the 5-year period ending on the date of sale. You may claim this exclusion only once in any 2-year period.
If you don't meet the 2-year requirement, you may be eligible to claim a reduced exclusion if you sell your
home because of an "unforeseen circumstance," such as a change in employment or a divorce. A loss on the sale of your
home, however, isn't tax deductible.
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