Selling your home can be a great financial move, and one of the perks is the potential tax exclusion on your profit.
- You can generally exclude up to $500,000 of gain if married filing jointly ($250,000 if single), provided you owned and lived in your principal residence for an aggregate of at least two of the five years before the sale.
- You can claim the exclusion once every two years.
Even if your sale is tax-free due to this exclusion, you might still need to report it to the IRS. If you received a 1099-S, you must report it. If you did not, you likely don’t have to, but reporting can still be beneficial.
Tax laws are complex, and the rules discussed here are particularly nuanced. We strongly recommend consulting with us for personalized advice tailored to your specific situation. We can help you understand your eligibility and optimize your tax situation.
Please reach out to your Brown CPA Group professional team with any questions at (847)509-4100.