If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return). To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:
- Owned the home for at least 2 years (the ownership test) and
- Lived in the home as your main home for at least 2 years (the use test).
Also, to qualify for the exclusion, neither you nor your spouse can have excluded a gain from the sale of another home during the 2-year period ending on the date of the sale. Per the IRS Schedule D instructions, if you sold or exchanged your main home, do not report it on your tax return unless your gain exceeds your exclusion amount.
Any gain not excluded is taxable and reported on Form 8949 and Schedule D (Form 1040). Do not report the sale of your main home on your tax return unless you have a gain and at least part of it is taxable. You cannot deduct a loss from the sale of your main home. Refer to IRS Publication 523 Selling Your Home for additional information on the sale of your home.
Home sale information is entered in the Investment Income section of the TaxACT program:
- From within your TaxACT return (Online or Desktop), click on the Federal Q&A tab
- Click Investment Income to expand the category and then expand the Gain or Loss on the Sale of Investments category
- Click on Sale of your home
- The program will proceed with the interview questions for you to enter or review the appropriate information