The gain realized from the sale of your main home may be fully or partially excluded from your income if you meet certain qualifications. Your main home is the one in which you live most of the time.
Two such qualifications that are required for this exclusion to take effect: the ownership and use tests.
This means that during the 5-year period ending on the date of the sale, you must have:
You will be allowed to exclude up to $250,000 of the gain from your income if you are single and $500,000 if you filled a joint return.
It is important to note that you will not be allowed to deduct any losses incurred from the sale of the main home.
Among other things, the tax payer will need to arrive at:
In order to report the sale or exchange of the home, Form 8949, Sale and Other Dispositions of Capital Assets, must be utilized if:
For persons who own more than one property gains can only be excluded to the extent that they are from the sale of the main home. Taxes must be paid on the gain from selling any other home. If you have two homes and live in both of them, your main home is the one you live in most of the time.
User | 2/01/2022