The centerpiece of Topic 701 is the , which allows homeowners to sell their primary residence and exclude a massive portion of their profit from federal income tax: Single Filers : Can exclude up to $250,000 of capital gains.
For deeper details, the IRS provides Publication 523, Selling Your Home, which includes worksheets to help calculate your specific gain or loss.
This is a complete exclusion, meaning you don't even have to reinvest the money into a new house to keep the profit tax-free. Core Requirements for the Benefit The centerpiece of Topic 701 is the ,
: You generally cannot have used the exclusion for another home sale in the two years prior to the current sale. Important "Gotchas" and Nuances
: If your profit exceeds the exclusion limits, you can often reduce your taxable gain by adding the cost of major home improvements (like a new roof or kitchen remodel) to your "cost basis". Core Requirements for the Benefit : You generally
In federal taxation, specifically addresses the Sale of Your Home , a critical subject for anyone looking to understand the tax implications of selling a primary residence. The $250,000 / $500,000 Exclusion
: Can exclude up to $500,000 of capital gains. The $250,000 / $500,000 Exclusion : Can exclude
: You must have lived in the home as your main residence for at least 24 months .