Some misconceptions exist related to Federal tax rules that apply to the sale of a home. Let’s clear up some of those misconceptions!
You can exclude a gain of up to $250,000 if you file as Single – or Married Filing Separately. If you are Married Filing Jointly, the amount increases to $500,000. In either case there are no longer any age restrictions. Your gains can only be excluded if you owned the home and used it as your main residence during at least 2 of the last 5 years prior to sale.
If you don’t meet these requirements, you might still qualify for a partial exclusion if you’re selling your home due to a job transfer, for health reasons, or due to certain unforeseeable events.
It’s important to note… a loss on the sale of your personal residence is NOT tax deductible.
Consult a tax professional if you need assistance determining your eligibility for the exclusion or preparing your tax return.
