1997 Tax Help Archives  

Sale of Your Home - General

This is archived information that pertains only to the 1997 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Prior to May 7, 1997, if you sold or exchanged your main home, you may have to pay tax on all or part of the gain. But the tax on the entire gain from the sale usually must be postponed if, within a specified period of time, you buy or build and live in a new main home which costs at least as much as the adjusted sales price of your old home. Refer to Topic 702 for more information on postponement of gain.

If you are 55 or older on the date of the sale or exchange of your home, you may be able to exclude part or all of the gain. However, you cannot deduct a loss on the sale of your main home. Refer to Topic 703 for more information on this exclusion of gain. If you sold your home under a contract that provides for part or all of the selling price to be paid in a later year, you made an installment sale. Refer to Topic 706 for more information. Attach Form 2119 to your Form 1040 to report the sale of your main home whether gain or loss in the year of the sale.

After May 6, 1997 a new exclusion applies to sales of your main home which repeals the postponement or gain and the one-time $125,000 exclusion. This new provision allows an individual to elect to exclude up to $250,000 or $500,000 for married individuals filing jointly for qualifying sales.

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