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Selling your Home

If you sold your main home, you may be able to exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from your federal tax return. This exclusion is allowed each time that you sell your main home, but generally no more frequently than once every two years.

To be eligible for this exclusion, your home must have been owned by you and used as your main home for a period of at least two out of the five years prior to its sale. You also must not have excluded gain on another home sold during the two years before the current sale.

If you and your spouse file a joint return for the year of the sale, you can exclude the gain if either of you qualifies for the exclusion. But both of you would have to meet the use test to claim the $500,000 maximum amount.

To exclude gain, a taxpayer must both own and use the home as a principal residence for two of the five years before the sale. The two years may consist of 24 full months or 730 days. Short absences, such as for a summer vacation, count as periods of use. Longer breaks, such as a one-year sabbatical, do not.

If you do not meet the ownership and use tests, you may be allowed to exclude a reduced maximum amount of the gain realized on the sale of your home if you sold your home due to health, a change in place of employment, or certain unforeseen circumstances. Unforeseen circumstances include, for example, divorce or legal separation, natural or man-made disaster resulting in a casualty to your home, or an involuntary conversion of your home.  Send us a message for more!

TAX TIPS FOR INDIVIDUALS
1. Tax Incentives for Higher Education
2. Check Withholding to Avoid a Tax Surprise
3. 5 Tips for Early Preparation
4. Amended Returns
5. Tips and Taxes
6. Filing an Extensions
7. Car Donations
8. Tax Credit For Hybrid Vehicles
9. Earned Income Tax Credit for Certain Workers
10. Refinancing your Home
11. Credit for the Elderly or Disabled
12. Selling your Home
13. Gift Giving
14. Name change after Marriage or Divorce
15. Filing Deadlines for CPA Firm of Rene Sarkhosh & Associates, Inc.
16. Your Appeal Rights
17. Information About IRS Notices
18. Payment Options
19. EFTPS – Electronic Federal Tax Payment System
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