{"id":323,"date":"2018-09-24T12:32:27","date_gmt":"2018-09-24T19:32:27","guid":{"rendered":"\/income-tax-tips-selling-home"},"modified":"2023-09-14T08:15:43","modified_gmt":"2023-09-14T15:15:43","slug":"income-tax-tips-selling-home","status":"publish","type":"post","link":"https:\/\/www.irs.com\/en\/income-tax-tips-selling-home\/","title":{"rendered":"Income Tax Tips for Selling a Home"},"content":{"rendered":"

Selling your home is often a triumph \u2013 but it can also be a stressful and complicated process. Don\u2019t forget to consider the tax implications for your real estate transactions.<\/span><\/p>\n

If you sell your home, you may be able to exclude from your income all or part of the gain from that sale. Here are some things to keep in mind when you\u2019re selling a home:<\/span><\/p>\n

Ownership & Use of the Home<\/strong><\/span><\/h3>\n

In order to qualify for the exclusion, the homeowner must pass the IRS ownership and use tests. During a 5-year period that ends on the date of sale, the homeowner must have owned the home for at least 2 years and<\/em> lived in the home (as their main home) for at least 2 years.<\/span><\/p>\n

Gain From a Home Sale<\/strong><\/span><\/h3>\n

If you sell your main home and you have a gain from the sale (i.e. you sell it for more than you purchased it), you may be able to exclude the gain from your <\/span>tax return<\/span><\/a>. Qualifying taxpayers can usually exclude up to $250,000 from their income (for single filers), or $500,000 for joint filers. Those who qualify to exclude the entire gain are not required to report the home sale on their income tax return.<\/span><\/p>\n

Loss From a Home Sale<\/strong><\/span><\/h3>\n

If you sell your home for less than what you paid for it, that is considered to be a \u201closs\u201d and is not tax-deductible.<\/span><\/p>\n

Reporting a Home Sale<\/strong><\/span><\/h3>\n

If you cannot exclude the gain from your income, you are required to report the home sale on your tax return. If you choose not to claim the exclusion, you must report the gain on your tax return. If you receive <\/span>Form 1099-S (Proceeds from Real Estate Transactions)<\/span><\/a> as part of the transaction, you must report the home sale on your tax return.<\/span><\/p>\n

Reporting Mortgage Debt<\/strong><\/span><\/h3>\n

Some people are required to report their forgiven\/cancelled debt as income on their tax return. Usually this includes taxpayers who underwent a mortgage workout, foreclosure, or other process in which a lender forgave\/cancelled mortgage debt on their home. Individuals who had a written agreement for debt forgiveness in place before<\/em> January 1, 2017 may be eligible to exclude the forgiven amount from their income.<\/span><\/p>\n

Exceptions<\/strong><\/span><\/h3>\n

The IRS grants exceptions for certain taxpayers \u2013 including individuals with a disability, certain members of the U.S. military, intelligence community, and Peace Corps workers.<\/span><\/p>\n

First-Time Homebuyer Tax Credit<\/strong><\/span><\/h3>\n

If you claimed the First-Time Homebuyer <\/span>Tax Credit<\/span><\/a> to buy your home, you should note that special rules apply to the sale. The IRS has a <\/span>First-Time Homebuyer Credit Account Look-up<\/span><\/a> tool that can be used to retrieve account information (such as the total amount of your tax credit or repayment amount).<\/span><\/p>\n

Multiple Homes<\/strong><\/span><\/h3>\n

If you own more than 1 (one) home, you are only allowed to exclude the gain on the sale of your main home. The IRS will require you to pay taxes on the gain from selling any other home.<\/span><\/p>\n

IRS Worksheets & Publications<\/strong><\/span><\/h3>\n

Publication 523 (Selling Your Home)<\/span><\/a> \u2013 Includes worksheets to help you determine the adjusted basis of the home sold, the gain or loss on the home sale, and the excluded gain on the home sale.<\/span><\/p>\n

IRS Tax Topic 611: Repayment of the First-Time Homebuyer Credit<\/span><\/a><\/p>\n

IRS Tax Topic 701: Sale of Your Home<\/span><\/a><\/p>\n

IRS Tax Topic 703: Basis of Assets<\/span><\/a><\/p>\n

IRS Tax Map: Selling Your Home<\/span><\/a><\/p>\n

\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Selling your home is often a triumph \u2013 but it can also be a stressful and complicated process. Don\u2019t forget to consider the tax implications for your real estate transactions. If you sell your home, you may be able to exclude from your income all or part of the gain from that sale. Here are […]<\/p>\n","protected":false},"author":6,"featured_media":324,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[20,171],"tags":[],"class_list":["post-323","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home","category-tax-tips"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/323","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/comments?post=323"}],"version-history":[{"count":5,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/323\/revisions"}],"predecessor-version":[{"id":8163,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/323\/revisions\/8163"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/media\/324"}],"wp:attachment":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/media?parent=323"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/categories?post=323"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/tags?post=323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}