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The tax code recognizes the importance of home ownership by allowing you to exclude gain when you sell your main home. To qualify for the maximum exclusion of gain ($250,000 or $500,000 if married filing jointly), you must meet the Eligibility Test, explained later.
This publication explains the tax rules that apply when you sell (or otherwise give up ownership of) a home.
In simple terms, this capital gains tax exclusion enables homeowners who meet specific requirements to exclude up to $250,000 (or up to $500,000 for married couples filing jointly) of capital...
File online. File with a tax pro. The ownership and use periods don’t have to be continuous. You pass the tests if you show that you owned and lived in the home for either: 24 full months. 730 days in the past five years. You can count short, temporary absences as periods of use.
For more detailed information from the IRS about selling your home, refer to IRS Publication 523.
Short-term capital gains on real estate sold in a year or less are taxed at your ordinary income tax rate. Long-term capital gains on homes sold after a year of ownership are taxed at 0%, 15% or...
(You can find details on acceptable cost-basis adjustments in IRS Publication 523, Selling Your Home.) Still, it's possible you may realize a taxable capital gain even after applying the personal residence exclusion and adjusting your cost basis.
You can get details in IRS Publication 523, Selling Your Home. The bad news (for some) is that the most gain you can exclude is $250,000 or $500,000 for joint returns. If you can’t exclude all or part of the gain, you will have to report the home sale on your tax return.
The IRS defines a capital improvement as an improvement that: Adds to the value of your home. Prolongs the useful life of your home. Adapts your home to new uses. A capital improvement is tax...
OVERVIEW. Though home-sale profit can be tax-free, there are still steps you can take to maximize the tax benefits of selling your home. Learn how to figure your gain, factoring in your cost basis, home improvements and more. TABLE OF CONTENTS. Profit on home sale can be tax-free. Do I have to pay taxes on the profit I made selling my home?