Selling Your Home?

10 Tax Tips from the IRS:

1. In Genreal, you are eligible to exclude the gain from the income if you have owned and used your home as your main home for 2 years out of the 5 years prior to the date of its sale.
2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).
3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the 2 year period prior to the sale of the home.
4. If you can exclude all of the gain, you do not need to report the sale on the tax return.
5. If you have a sale that is not exludible, you must report the sale on the tax return.  You must report it on Form 1040 or Schedule D.
6. You cannot deduct a loss from the sale of your main home.
7. Publication 523 "Selling Your Home" will help you figure the adjusted basis of the home you sold, the gain or loss on the sale, and the gain you can exclude.
8. If you have more than 1 home, you can only exlcude the sale of your main home.  You must pay tax on any other home you sell for a gain.  If you have two homes and you live in both of them, then the home you live in most is your main home.
9. If you recieved the 1st time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as the principal residence, you are required to repay the credit.  Repayment of the 1st time homebuyer credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First Time Homebuyer Credit and Repayment of the Credit.  The full amount of the credit is reflected as additional tax on that year's tax return.
10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you recieve correspondance from the IRS.  Use Form 8822, Change of Address, to notify the IRS on changing your address.