Do you know about this tax implication for homesellers?
05/15/2015 | Author: Editorial Staff
My client bought his home a few years ago, but now he wants to sell it and take advantage of the tax exclusion of up to $250,000 on the proceeds. What criteria does he have to meet to qualify for the tax exclusion?
The IRS allows a seller to exclude from his taxable income a gain of up to $250,000 on the sale of his home (or $500,000 if he is married filing jointly) if he:
- Owned the home and used it as his principal residence during at least two of the last five years before the sale;
- Didn’t acquire the home through a 1031 exchange during the past five years; and
- Didn’t exclude a gain on another home sold during the two years before the current sale.
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