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If you sold or exchanged your home after May 6, 1997 you may be allowed
to exclude up to $250,000 of gain ($500,000, if married filing a joint
return) realized on the sale or exchange of your main home. The
exclusion is allowed each time you sell or exchange your main home,
generally no more frequently than once every two years. If a sale or
contract was signed after May 6, 1997 but before August 5, 1997, you may
use the postponement provision or the $125,000 one-time exclusion.
Select
More
Info.
If you sold your home under a contract that provides for part or the
entire selling price to be paid in a later year, you made an installment
sale. Select Topic
705 for more information.
To be eligible for exclusion, your main home must have been owned by
you and used as your main home for a period of at least two years out of
the five years prior to its sale or exchange. You can meet the ownership
and use tests during different two-year periods. However, both tests
must be met during the five-year period ending on the date of the sale.
If you and your spouse file a joint return for the year of the sale, you
can exclude gain if either of you qualified for the exclusion.
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The maximum amount of gain you can exclude will be reduced if:
- You owned a home on
August 5, 1997,
- You sold your home
prior to August 5, 1999 and did not meet the ownership and use tests
or,
- Due to a change in
health or employment you either did not meet the ownership and use
tests or are excluding gain on the sale of another home after May 6,
1997.
Beginning in 1998, Form 2119 is no longer used to report the sale of
a home. If you sold your main home in 1998, report the sale only if you
have a gain that is not excluded from your income. As mentioned above,
you may be able to exclude a gain up to $250,000 ($500,000 on a joint
return in most cases). If you cannot exclude all of the gain, report the
sale on Schedule
D (Form 1040), Capital Gains and Losses.
For additional information on selling your home obtain Publication
523, Selling Your Home. Forms and publications can be
downloaded
from this site, or ordered by calling 1-800-829-3676.
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