Introduction
This publication explains the tax rules that apply when you sell your main home. Generally, your main home is the one in which
you live most of the
time.
If you sold your main home in 2004, you may be able to exclude from income any gain up to a limit of $250,000 ($500,000 on
a joint return in most
cases). See Excluding the Gain, later. 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). You may also have to include
Form 4797, Sales of
Business Property. See Reporting the Sale, later.
If you have a loss on the sale, you cannot deduct it on your return.
The main topics in this publication are:
Other topics include:
-
Business use or rental of home,
-
Deducting taxes in the year of sale, and
-
Recapturing a federal mortgage subsidy.
Worksheets.
This publication includes worksheets you can use to figure your gain (or loss) and your exclusion. Use
Worksheet 1 to figure the
adjusted basis of the home you sold. Use
Worksheet 2 to figure the gain (or loss), the exclusion, and the taxable gain (if any) on the
sale. In some situations, you may also need to use
Worksheet 3 to figure a reduced maximum exclusion.
Sale before May 7, 1997.
If you sold your main home before May 7, 1997, and postponed the gain while serving in the Armed Forces, see Publication
3, Armed Forces' Tax
Guide, for special rules that are not covered in this publication.
Date of sale.
If you received a Form 1099-S, Proceeds From Real Estate Transactions, the date of
sale should be shown in box 1. If you did not receive this form, the date of sale is the earlier of (a) the date title transferred
or (b) the date the
economic burdens and benefits of ownership shifted to the buyer. In most cases, these dates are the same.
What is not covered in this publication.
This publication does not cover the sale of rental property, second homes, or vacation homes. For information on how
to report those sales, see
Publication 544, Sales and Other Dispositions of Assets.
Comments and suggestions.
We welcome your comments about this publication and your suggestions for future editions.
You can write to us at the following address:
Internal Revenue Service
Individual Forms and Publications Branch
SE:W:CAR:MP:T:I
1111 Constitution Ave. NW, IR-6406
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number,
including the area code, in
your correspondence.
You can email us at
*[email protected]. (The asterisk must be included in the
address.) Please put “
Publications Comment” on the subject line. Although we cannot respond individually to each email, we do appreciate your
feedback and will consider your comments as we revise our tax products.
Tax questions.
If you have a tax question, visit
www.irs.gov or call 1-800-829-1040. We cannot answer tax questions at either
of the addresses listed above.
Ordering forms and publications.
Visit
www.irs.gov/formspubs
to download forms and publications, call 1-800-829-3676, or write to one of the three addresses shown under
How To Get Tax Help in the back
of this publication.
