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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 two years (the ownership test) and
  • Lived in the home as your main home for at least two 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 two-year period ending on the date of the sale. Per IRS Instructions for Schedule D, 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 Sales and Other Dispositions of Capital Assets and Schedule D (Form 1040) Capital Gains and Losses. 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:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Investment Income in the Federal Quick Q&A Topics menu to expand, click Gain or loss on the sale of investments to expand, then click Sale of your main home.
  3. Continue with the interview process to enter all of the appropriate information.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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