CHAPTER 29Tax Savings for Residence Sales
You may avoid tax on gain on the sale of a principal residence if you owned and used it as your principal residence for at least two years during the five‐year ownership period ending on the date of sale. If you are single, you may avoid tax on up to $250,000 of gain, $500,000 if you are married and file jointly. However, gain attributable to nonqualified use after 2008 is not excludable (29.2).
If you used the residence as your principal residence for less than two years, you may avoid tax if you sold because of a change of job location, poor health or unforeseen circumstance (29.4).
You may not deduct a loss on the sale of a personal residence. Losses on the sale of property devoted to personal use in general are nondeductible (29.8). However, there are circumstances under which you may claim a loss deduction on the sale of a residence (29.9–29.10).
If you rent out a residential property and you or family members also use the residence during the year, ...
Get J.K. Lasser's Your Income Tax 2023, 2nd Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
