If you sold your home during the year and made a gain, you may be able to exclude all of that gain from your taxable income. To qualify for this tax benefit, the home sold must have been your principal residence. You can exclude from your taxable income, the gain from the sale of your main home, of up to $250,000 ($500,000 if filing a joint return). To qualify for this exclusion, however, all of the following must be true:
• You owned the home for at least 2 of the last 5 years (the ownership test).
• You lived in the home as your main home for at least 2 of the last 5 years (the use test).
• You did not exclude gain from the sale of another home during the 2-year period ending on the date of the sale. Read more