Q&A of the Week June 28, 2023

Question

I am thinking of selling my home. If I sell my home for more than I paid, can I exclude the gain from my income when I file my tax return?

Answer

When you sell your home, you may be eligible to exclude up to $250,000 (or up to $500,000 for joint tax returns) of the gain from your taxable income. To claim an exclusion, here is what you need to consider:

• During a 5-year period that ends on the date of the sale, the homeowner must have lived in the home as their main residence for at least 2 years.

• If your house sells for less than you paid, the loss is not deductible.

• If you own more than one home, you can only exclude taxes from your main home

Taxpayers who don't qualify to exclude the gain must report it on their tax return. Also, if you receive Form 1099-S, you must report the sale on your tax return, even if there is no taxable gain.

Exceptions include individuals with a disability, certain members of the military, and Peace Corps workers.