More Tax Advice

You may qualify to exclude from your income all or part of any gain from the sale of your main home. Your main home is the one in which you live most of the time.


Ownership and Use Tests


To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:


Owned the home for at least 2 years (the ownership test)
Lived in the home as your main home for at least 2 years (the use test)
Gain


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).


If you can exclude all of the gain, you do not need to report the sale on your tax return
If you have gain that cannot be excluded, it is taxable. Report it on Schedule D (Form 1040)
Loss


You cannot deduct a loss from the sale of your main home.


Worksheets


Worksheets are included in Publication 523, Selling Your Condo to help you figure the:


Adjusted basis of the home you sold

Gain (or loss) on the sale

Gain that you can exclude

Reporting the Sale


Do not report the sale of your main home on your tax return unless you have a gain and at least part of it is taxable. Report any taxable gain on Schedule D (Form 1040).


More Than One Home


If you have more than one home, you can exclude gain only from the sale of your main home. You must pay tax on the gain from selling 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.


Example One:


You own and live in a house in the city. You also own a beach house, which you use during the summer months. The house in the city is your main home; the beach house is not.


Example Two:


You own a house, but you live in another house that you rent. The rented house is your main home.


Business Use or Rental of Home


You may be able to exclude your gain from the sale of a home that you have used for business or to produce rental income. But you must meet the ownership and use tests.


Example:


On May 30, 1997, Amy bought a house. She moved in on that date and lived in it until May 31, 1999, when she moved out of the house and put it up for rent. The house was rented from June 1, 1999, to March 31, 2001. Amy moved back into the house on April 1, 2001, and lived there until she sold it on January 31, 2003. During the 5-year period ending on the date of the sale (February 1, 1998 - January 31, 2003), Amy owned and lived in the house for more than 2 years.


Amy can exclude gain up to $250,000. However, she cannot exclude the part of the gain equal to the depreciation she claimed for renting the house.


We would love to hear from you!Send us a message and we’ll get right back in touch.
Stephanie Moser
623-451-6698
stephaniesellsaz@gmail.com
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The Moser Group

The Moser Group

Ph. 623-451-6698
3039 W. Peoria Ave ste 102
Phoenix AZ 85260
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  • 533 Guadalupe Road #2038
    $160,000
  • Bedrooms2
  • Baths1.75
  • Stories2
  • Square Footage828
  • Average Price SqFt$185,000
  • Days on Market38
  • CityMesa
  • Year Built1985

Phoenix Metro Condo Listings

Inventory

9,654
For sale
1,215
For rent

Phoenix Metro Condo Statistics

  • $59,800 - 50 MilPrice Range
  • $151avg price / Sq.Ft.
  • 98 avg days on market
  • Avg % of building is for sale 2.7 %
  • Avg % of building is for rent 0.4 %
  • Avg % of building sold in previous 12 months 2.6 %
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