Per Instructions for Schedule D Capital Gains and Losses, starting on page D-2:
Sale of Your Home
You may not need to report the sale or exchange of your main home. If you must report it, complete Form 8949 before Schedule D.
Report the sale or exchange of your main home on Form 8949 if:
- You can't exclude all of your gain from income, or
- You received a Form 1099-S for the sale or exchange
Any gain you can't exclude is taxable. Generally, if you meet the following two tests, you can exclude up to $250,000 of gain. If both you and your spouse meet these tests and you file a joint return, you can exclude up to $500,000 of gain (but only one spouse needs to meet the ownership requirement in Test 1
During the 5-year period ending on the date you sold or exchanged your home, you owned it for 2 years or more (the ownership requirement) and lived in it as your main home for 2 years or more (the use requirement). Test 2.
You haven't excluded gain on the sale or exchange of another main home during the 2-year period ending on the date of the sale or exchange of your home. Reduced exclusion.
Even if you don't meet one or both of the above two tests, you still can claim an exclusion if you sold or exchanged the home because of a change in place of employment, health, or certain unforeseen circumstances. In this case, the maximum amount of gain you can exclude is reduced. For more information, see Pub. 523
. Sale of home by surviving spouse.
If your spouse died before the sale or exchange, you can exclude up to $500,000 of gain if:
Exceptions to Test 1.
- The sale or exchange is no later than 2 years after your spouse's death;
- Just before your spouse's death, both spouses met the use requirement of Test 1, at least one spouse met the ownership requirement of Test 1, and both spouses met Test 2; and
- You didn't remarry before the sale or exchange.
You can choose to have the 5-year test period for ownership and use in Test 1
suspended during any period you or your spouse serve outside the United States as a Peace Corps volunteer or serve on qualified official extended duty as a member of the uniformed services or Foreign Service of the United States, as an employee of the intelligence community, or outside the United States as an employee of the Peace Corps. This means you may be able to meet Test 1
even if, because of your service, you didn't actually use the home as your main home for at least the required 2 years during the 5-year period ending on the date of sale. The 5-year period can't be extended for more than 10 years.Sale of home acquired in a like-kind exchange.
You can't exclude any gain if:
- You acquired your home in a like-kind exchange in which all or part of the gain wasn't recognized, and
- You sold or exchanged the home during the 5-year period beginning on the date you acquired it.
How to report the sale of your main home. If you have to report the sale or exchange, report it on Form 8949. If the gain or loss is short-term, report it in Part I of Form 8949 with box C checked. If the gain or loss is long-term, report it in Part II of Form 8949 with box F checked.
If you had a gain and can exclude part or all of it, enter “H” in column (f) of Form 8949. Enter the exclusion as a negative number (in parentheses) in column (g)of Form 8949. See the instructions for Form 8949, columns (f), (g), and (h). Complete all columns.
If you had a loss but have to report the sale or exchange because you got a Form 1099-S, see Nondeductible Losses, later, for instructions about how to report it.
More information. See Pub. 523 for additional details, including how to figure and report any taxable gain if:
- You (or your spouse if married) used any part of the home for business or rental purposes after May 6, 1997, or
- There was a period of time after 2008 when the home wasn't your main home.
The Sale of Home information is entered in the Investment Income section of the TaxAct® program:
- From within your TaxAct return (Online or Desktop), click on the Federal tab. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal.
- Click Investment Income to expand the section and then expand the Gain or Loss on the Sale of Investments section
- Click on Sale of your main home
- The program will proceed with the interview questions for you to enter or review the appropriate information
Please note: If you received a Form 1099-S for the sale, there will be a checkbox on the screen titled Home Sale - Form 1099-S. When this box is checked, the sale of home information will be reported on Schedule D regardless of whether there was a nondeductible loss or fully excludable gain.