Fact 1
If you’ve owned and lived in your home for 2 of the 5 years prior to selling it, you can generally exclude up to $250,000 of the gain from your income. 1 ($500,000 on a joint return in most cases).
Fact 2
You are not eligible for this exclusion if you sold another principal residence within the past 2 years and excluded the allowable gain from your income.
Fact 3
If you can exclude ALL of the gain from the sale of your primary residence, you don’t need to report the sale on your tax return.
Fact 4
If you have a gain on your principal residence that exceeds the allowable deduction, it is taxable.
Fact 5
You can’t deduct a loss from the sale of your primary residence.
Fact 6
Special rules may apply when you sell a home, (See IRS Publication 523, “Selling Your Home,” for details.) if you’ve received the first-time homebuyer credit.