Publication 523
From TaxAlmanac
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Selling Your Home
Overview
This publication explains the tax rules that apply when you sell your main home. Generally, your main home is the one in which you live most of the time.
If you sold your main home in 2005, you may be able to exclude from income any gain up to a limit of $250,000 ($500,000 on a joint return in most cases). See Excluding the Gain, later. If you can exclude all of the gain, you do not need to report the sale on your tax return.
If you have gain that cannot be excluded, it is taxable. Report it on Schedule D (Form 1040). You may also have to include Form 4797, Sales of Business Property. See Reporting the Sale, later.
If you have a loss on the sale, you cannot deduct it on your return.
The main topics in this publication are:
- Figuring gain or loss,
- Basis,
- Excluding the gain,
- Ownership and use tests, and
- Reporting the sale.
Other topics include:
- Business use or rental of home,
- Deducting taxes in the year of sale, and
- Recapturing a federal mortgage subsidy.
