How Do You Exclude Gain On Home Sale For Taxes?
If you sell your main home at a gain, and have lived in it for at least two years during the five-year period ending on the date of sale, you can exclude the gain from taxable income up to a maximum exclusion of $500,000 for married persons filing a joint return, and $250,000 exclusion for a single person. Gains on the sale of stock in a cooperative housing corporation would also qualify if the ownership and use tests are met. Calculate the actual gain by subtracting the purchase price from the sale price, then subtracting expenses from improvements you made as an owner. Also subtract real estate broker fees and other expenses you paid during the sales process. Verify that you meet the ownership and use tests and if you have lived in the home for less than the required two years. Health problems, a change in place of employment or other unforeseen circumstances quality you for a reduced maximum exclusion on the gain. Calculate the reduced exclusion using Internal Revenue Service (IRS)
