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A single taxpayer purchased a home on July 15, 2008, that she uses as her principal residence. On July 14, 2009, she sells the house because of a change in her place of employment. The taxpayer has not excluded gain under IRC § 121 on a prior sale or exchange of property within the last two years.
22 kwi 2024 · You might owe capital gains tax if you sell a home if the property's value has appreciated. However, if you sell your principal home, you may exclude from your taxable income up to $250,000 of the gain from the sale (up to $500,000 if you're married and file a joint return.)
A home sale often doesn’t affect your taxes. If you have a loss on the sale, you can’t deduct it from income. But, if you make a profit, you can often exclude it. This is called “home sale exclusion”, or less commonly “sale of a personal residence exclusion”.
When you sell your home, up to $500,000 of the profit from the sale can be completely untaxed. This special tax exclusion is defined in section 121 of the US tax code. This can result in a massive tax savings if you qualify.
If you qualify for an exclusion on your home sale, up to $250,000 ($500,000 if married and filing jointly) of your gain will be tax free. If your gain is more than that amount, or if you qualify only for a partial exclusion, then some of your gain may be taxable.
4 mar 2024 · The home sale exclusion is a provision in the U.S. tax code that allows homeowners to exclude up to $250,000 of capital gains on the sale of their primary residence from their income ($500,000 for married couples filing jointly).
For joint owners who are not married, up to $250,000 of gain is tax-free for each qualifying owner. To exclude gain, a taxpayer must both own and use the home as a principal residence for two of the five years before the sale. The ownership and use periods need not be concurrent.
