If you’re selling your home, you may be able to exclude all or part of any gain from the sale when filing your tax return. To see if you are eligible for this benefit, you have to consider:
- The home’s ownership and use: Over five years, ending on the date of the sale, the homeowner must have owned the house and lived in it as their main home for at least two years.
- Any gains: Taxpayers who sell their primary home and gain from the sale may be able to exclude up to $250,000 of that gain from their income. The exclusion increases to $500,000 for a married couple, filing jointly.
- Mortgage debt: Generally, if your mortgage debt was forgiven or canceled, such as in the case of a foreclosure, you have to report this forgiven debt as income on your tax return.
This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS11
Footnotes and Sources
- IRS.gov, January 15, 2025
