You
may qualify to exclude
from your income all
or part of any gain
from the sale of your
main home. To qualify,
you must meet the
ownership and use
tests.
You can claim the
exclusion if, during
the 5 year period
ending on the date
of the sale, you have
owned the home for
at least 2 years (ownership
test), and lived in
the home as your main
home for at least
2 years (use test).
You can exclude the
entire gain on the
sale of your main
home up to $250,000
or $500,000 if all
of the following are
true. You are married
and file a joint return
for the year. Either
you or your spouse
meets the ownership
test. Both you and
your spouse meet the
use test. And neither
you nor your spouse
excluded gain form
the sale of another
home within 2 years.
If your home was transferred
to you by your spouse
(or former spouse
if the transfer was
incident to divorce),
you are considered
to have owned it during
any period of time
when your spouse owned
it.
If you owned and lived
in the property as
your main home for
less than 2 years,
you may be able to
claim a reduced exclusion.
The maximum amount
of gain you can exclude
will be reduced if
you did not meet the
ownership and use
tests due to a change
in health, place of
employment, or unforeseen
circumstances. Unforeseen
circumstances are
considered if any
of the following events
occurred; an involuntary
conversion of your
home, natural or man-made
disasters or war or
terrorism, in the
case of death, unemployment,
divorce, multiple
births resulting from
the same pregnancy,
or an event the IRS
determined to be an
unforeseen circumstance.
You cannot exclude
gain on the sale of
your home if, during
the 2 years period
ending on the date
of the sale, you sold
another home at a
gain and excluded
all or part of that
gain. If you cannot
exclude the gain,
you must include it
in your income. However,
you can still claim
a reduced exclusion,
if the primary reason
you sold the home
was the same reason
as above mentioned.
