|Tax Topic #701
||2008 Tax Year
Topic 701 - Sale of Your Home
If you have a gain from the sale of your main home, you may qualify to
exclude all or part of that gain from your income. Publication 523, Selling
Your Home, provides rules and worksheets.
If you sold your home under a contract that provides for part or the entire
selling price to be paid in a later year, you made an "installment sale".
Refer to Topic 705, Installment Sales, for more information.
In general, you are eligible for the exclusion if you have owned and used
your home as your main home for a period aggregating at least two years out
of the five years prior to its sale. Refer to Publication 523 for the
complete eligibility requirements as well as exceptions to the two year rule.
Report the sale of your main home only if you have a gain that is not excluded
from your income. In most cases if you have a gain that is not excluded you
must report it on Form 1040, Schedule D (PDF), Capital
Gains and Losses.
If you were on qualified official extended duty in the Uniformed Services,
the Foreign Service, or the intelligence community, you may suspend the five-year
test period for up to 10 years. You are on qualified extended duty when, for
more than 90 days or for an indefinite period, you are:
- At a duty station that is at least 50 miles from your main home, or
- Residing under government orders in government housing.
Page Last Reviewed or Updated: December 22, 2008
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