Sale of Your Home
If you sold your main home, you may be able to exclude up to $250,000 of the gain ($500,000 for married taxpayers filing jointly) from your federal tax return. This exclusion is allowed each time you sell your main home, but due to the exclusion tests, this generally cannot occur more frequently than once every two years.
To be eligible for the full exclusion, your home must have been owned by you and used as your principal residence for a period of at least two out of the five years prior to its sale. The two-year period does not have to be continuous, and short absences – such as summer vacations – count as periods of use. Also, you may not have claimed the exclusion anytime in the prior two years.
If you owned and lived in the property as your main home for less than two years, you may still be able to claim the exclusion. However, the maximum amount you may be able to exclude will be reduced.
If you and your spouse file a joint return for the year of the sale, you can exclude the gain if either of you qualify for the ownership exclusion, but both of you would have to meet the use test to claim the full $500,000 exemption amount. And as mentioned above, neither spouse may have claimed the exemption at any point in the prior two years.
Please contact us via email or call 404-892-7967 for more information regarding the sale of your home and how it will affect your tax return.