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Will the sale of my personal residence be subject to income tax? |
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The Internal Revenue Service will not tax the proceeds from the sale of your home when the gain is under $250,000 for a single taxpayer or $500,000 for Married Filing Joint taxpayers. In order to exclude the gain from your income, you will need to meet the Ownership and Use Test. The test examines the last 5 years immediately preceding the sale date, where you are required to have both owned the home for at least 2 years and lived in the home as a main residence for at least 2 years (does not have to be continuous or concurrent). If the sale results in a loss, you will be unable to claim the loss on your tax return. Any gain that is over the exemption limits are reported on Schedule D on Form 1040. |
