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IRS.gov Website
Publication 17
taxmap/pub17/p17-079.htm#en_us_publink1000172366

Chapter 15
Selling Your Home(p108)


What's New(p108)

rule
EIC
At the time this publication went to print, Congress was considering legislation that would do the following.
  1. Provide additional tax relief for those affected by certain 2018 disasters.
  2. Extend certain tax benefits that expired at the end of 2017 and that currently can't be claimed on your 2018 tax return.
  3. Change certain other tax provisions.
To learn whether this legislation was enacted resulting in changes that affect your 2018 tax return, go to Recent Developments at IRS.gov/Pub17.
The Tax Cuts and Jobs Act provides for the temporary deferral of gain on the sale of your home. See Deferral of Gain, later.

Reminder(p108)

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taxmap/pub17/p17-079.htm#en_us_publink1000252207
Home sold with undeducted points.(p108)
If you haven’t deducted all the points you paid to secure a mortgage on your old home, you may be able to deduct the remaining points in the year of the sale. See Mortgage ending early under Points in chapter 24.
taxmap/pub17/p17-079.htm#en_us_publink1000271745
This chapter explains the tax rules that apply when you sell your main home. In most cases, your main home is the one in which you live most of the time.
If you sold your main home in 2018, you may be able to exclude from income any gain up to a limit of $250,000 ($500,000 on a joint return in most cases). See Excluding the Gain, later. Generally, if you can exclude all the gain, you don’t need to report the sale on your tax return.
In addition, you may be able to temporarily defer capital gains invested in a Qualified Opportunity Fund (QOF). You also may be able to permanently exclude capital gains from the sale or exchange of an investment in a QOF if the investment is held for at least 10 years.
If you have gain that is more than the exclusion amount or that otherwise can't be excluded, then you have taxable gain. Report it on Form 8949, Sales and Other Dispositions of Capital Assets, and Schedule D (Form 1040). You also may have to complete Form 4797, Sales of Business Property. See Reporting the Sale, later.
If you have a loss on the sale, you generally can’t deduct it on your return. However, you may need to report it. See Reporting the Sale, later.
The following are main topics in this chapter.Other topics include the following.

taxmap/pub17/p17-079.htm#TXMP0a89cd2d

Useful items

You may want to see:


Publication
 504 Divorced or Separated Individuals
 505 Tax Withholding and Estimated Tax
 519 U.S. Tax Guide for Aliens
 523  Selling Your Home
 530  Tax Information for Homeowners
 537 Installment Sales
 544 Sales and Other Dispositions of Assets
 547 Casualties, Disasters, and Thefts
 4492 Information for Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma
 4492-B Information for Affected Taxpayers in the Midwestern Disaster Areas
 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments
 4895 Tax Treatment of Property Acquired From a Decedent Dying in 2010
Form (and Instructions)
 Schedule D (Form 1040) : Capital Gains and Losses
 982: Reduction of Tax Attributes Due to Discharge of Indebtedness
 8828 : Recapture of Federal Mortgage Subsidy
 8949: Sales and Other Dispositions of Capital Assets
For these and other useful items, go to IRS.gov/Forms.
taxmap/pub17/p17-079.htm#en_us_publink1000172379

Main Home(p109)

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This section explains the term "main home." Usually, the home you live in most of the time is your main home and can be a:
To exclude gain under the rules of this chapter, in most cases, you must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale.
taxmap/pub17/p17-079.htm#en_us_publink1000172380

Land.(p109)

rule
If you sell the land on which your main home is located, but not the house itself, you can’t exclude any gain you have from the sale of the land. However, if you sell vacant land that is used as part of your main home and that is adjacent to the land on which your home sits, you may be able to exclude the gain from the sale under certain circumstances. See Pub. 523 for more information.
taxmap/pub17/p17-079.htm#en_us_publink1000172381

Example.(p109)

You buy a piece of land and move your main home to it. Then you sell the land on which your main home was located. This sale isn’t considered a sale of your main home, and you can’t exclude any gain on the sale of the land.
taxmap/pub17/p17-079.htm#en_us_publink1000172382

More than one home.(p109)

rule
If you have more than one home, you can exclude gain only from the sale of your main home. You must include in income gain from the sale of any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time during the year.
taxmap/pub17/p17-079.htm#en_us_publink1000297313

Example 1.(p109)

You own two homes, one in New York and one in Florida. From 2014 through 2018, you live in the New York home for 7 months and in the Florida residence for 5 months of each year. In the absence of facts and circumstances indicating otherwise, the New York home is your main home. You would be eligible to exclude the gain from the sale of the New York home but you wouldn’t be eligible to exclude the gain on the Florida home in 2018.
taxmap/pub17/p17-079.htm#en_us_publink1000172384

Example 2.(p109)

You own a house, but you live in another house that you rent. The rented house is your main home.
taxmap/pub17/p17-079.htm#en_us_publink1000297314

Example 3.(p109)

You own two homes, one in Virginia and one in New Hampshire. In 2014 and 2015, you lived in the Virginia home. In 2016 and 2017, you lived in the New Hampshire home. In 2018, you lived again in the Virginia home. Your main home in 2014, 2015, and 2018 is the Virginia home. Your main home in 2016 and 2017 is the New Hampshire home. You would be eligible to exclude gain from the sale of either home (but not both) in 2018.
taxmap/pub17/p17-079.htm#en_us_publink1000172385

Property used partly as your main home.(p109)

rule
If you use only part of the property as your main home, the rules discussed in this publication apply only to the gain or loss on the sale of that part of the property. For details, see Business Use or Rental of Home, later.