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E File Your State Taxes For Free

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E File Your State Taxes For Free

E file your state taxes for free 9. E file your state taxes for free   Worksheets Table of Contents When Should I Figure MAC?Checking the Previous Year's Contributions Available Worksheets Chapter 2 introduced you to the term maximum amount contributable (MAC). E file your state taxes for free Generally, your MAC is the lesser of your: Limit on annual additions (chapter 3), or Limit on elective deferrals (chapter 4). E file your state taxes for free The worksheets in this chapter can help you figure the cost of incidental life insurance, your includible compensation, your limit on annual additions, your limit on elective deferrals, your limit on catch-up contributions, and your MAC. E file your state taxes for free After completing the worksheets, you should maintain them with your 403(b) records for that year. E file your state taxes for free Do not attach them to your tax return. E file your state taxes for free At the end of the year or the beginning of the next year, you should compare your estimated compensation figures with your actual figures. E file your state taxes for free If your compensation is the same as, or more than, the projected amounts and the calculations are correct, then you should simply file these worksheets with your other tax records for the year. E file your state taxes for free If your compensation was lower than your estimated figures, you will need to check the amount contributed during the year to determine if contributions are more than your MAC. E file your state taxes for free When Should I Figure MAC? At the beginning of each year, you should figure your MAC using a conservative estimate of your compensation. E file your state taxes for free Should your income change during the year, you should refigure your MAC based on a revised conservative estimate. E file your state taxes for free By doing this, you will be able to determine if contributions to your 403(b) account should be increased or decreased for the year. E file your state taxes for free Checking the Previous Year's Contributions At the beginning of the following year, you should refigure your MAC based on your actual earned income. E file your state taxes for free At the end of the current year or the beginning of the next year, you should check your contributions to be sure you did not exceed your MAC. E file your state taxes for free This means refiguring your limit based on your actual compensation figures for the year. E file your state taxes for free This will allow you to determine if the amount contributed is more than the allowable amounts, and possibly avoid additional taxes. E file your state taxes for free Available Worksheets The following worksheets have been provided to help you figure your MAC. E file your state taxes for free Worksheet A. E file your state taxes for free Cost of Incidental Life Insurance. E file your state taxes for free Worksheet B. E file your state taxes for free Includible Compensation for Your Most Recent Year of Service Worksheet C. E file your state taxes for free Limit on Catch-Up Contributions. E file your state taxes for free ??? Worksheet 1. E file your state taxes for free Maximum Amount Contributable (MAC). E file your state taxes for free Worksheet A. E file your state taxes for free Cost of Incidental Life Insurance Note. E file your state taxes for free Use this worksheet to figure the cost of incidental life insurance included in your annuity contract. E file your state taxes for free This amount will be used to figure includible compensation for your most recent year of service. E file your state taxes for free 1. E file your state taxes for free Enter the value of the contract (amount payable upon your death) 1. E file your state taxes for free   2. E file your state taxes for free Enter the cash value in the contract at the end of the year 2. E file your state taxes for free   3. E file your state taxes for free Subtract line 2 from line 1. E file your state taxes for free This is the value of your current life insurance protection 3. E file your state taxes for free   4. E file your state taxes for free Enter your age on your birthday nearest the beginning of the policy year 4. E file your state taxes for free   5. E file your state taxes for free Enter the 1-year term premium for $1,000 of life insurance based on your age. E file your state taxes for free (From Figure 3-1) 5. E file your state taxes for free   6. E file your state taxes for free Divide line 3 by $1,000 6. E file your state taxes for free   7. E file your state taxes for free Multiply line 6 by line 5. E file your state taxes for free This is the cost of your incidental life insurance 7. E file your state taxes for free   Worksheet B. E file your state taxes for free Includible Compensation for Your Most Recent Year of Service1 Note. E file your state taxes for free Use this worksheet to figure includible compensation for your most recent year of service. E file your state taxes for free 1. E file your state taxes for free Enter your includible wages from the employer maintaining your 403(b) account for your most recent year of service 1. E file your state taxes for free   2. E file your state taxes for free Enter elective deferrals excluded from your gross income for your most recent year of service2 2. E file your state taxes for free   3. E file your state taxes for free Enter amounts contributed or deferred by your employer under a cafeteria plan for your most recent year of service 3. E file your state taxes for free   4. E file your state taxes for free Enter amounts contributed or deferred by your employer according to your election to your 457 account (a nonqualified plan of a state or local government or of a tax-exempt organization) for your most recent year of service 4. E file your state taxes for free   5. E file your state taxes for free Enter pre-tax contributions (employer's contributions made on your behalf according to your election) to a qualified transportation fringe benefit plan for your most recent year of service 5. E file your state taxes for free   6. E file your state taxes for free Enter your foreign earned income exclusion for your most recent year of service 6. E file your state taxes for free   7. E file your state taxes for free Add lines 1, 2, 3, 4, 5, and 6 7. E file your state taxes for free   8. E file your state taxes for free Enter the cost of incidental life insurance that is part of your annuity contract for your most recent year of service 8. E file your state taxes for free   9. E file your state taxes for free Enter compensation that was both: Earned during your most recent year of service, and Earned while your employer was not qualified to maintain a 403(b) plan 9. E file your state taxes for free   10. E file your state taxes for free Add lines 8 and 9 10. E file your state taxes for free   11. E file your state taxes for free Subtract line 10 from line 7. E file your state taxes for free This is your includible compensation for your most recent year of service 11. E file your state taxes for free   1Use estimated amounts if figuring includible compensation before the end of the year. E file your state taxes for free  2Elective deferrals made to a designated Roth account are not excluded from your gross income and should not be included on this line. E file your state taxes for free Worksheet C. E file your state taxes for free Limit on Catch-Up Contributions Note. E file your state taxes for free If you will be age 50 or older by the end of the year, use this worksheet to figure your limit on catch-up contributions. E file your state taxes for free 1. E file your state taxes for free Maximum catch-up contributions 1. E file your state taxes for free $5,500 2. E file your state taxes for free Enter your includible compensation for your most recent year of service 2. E file your state taxes for free   3. E file your state taxes for free Enter your elective deferrals 3. E file your state taxes for free   4. E file your state taxes for free Subtract line 3 from line 2 4. E file your state taxes for free   5. E file your state taxes for free Enter the lesser of line 1 or line 4. E file your state taxes for free This is your limit on catch-up contributions 5. E file your state taxes for free   Worksheet 1. E file your state taxes for free Maximum Amount Contributable (MAC) Note. E file your state taxes for free Use this worksheet to figure your MAC. E file your state taxes for free Part I. E file your state taxes for free Limit on Annual Additions     1. E file your state taxes for free Enter your includible compensation for your most recent year of service 1. E file your state taxes for free   2. E file your state taxes for free Maximum1: For 2013, enter $51,000 For 2014, enter $52,000 2. E file your state taxes for free   3. E file your state taxes for free Enter the lesser of line 1 or line 2. E file your state taxes for free This is your limit on annual additions 3. E file your state taxes for free     Caution: If you had only nonelective contributions, skip Part II and enter the amount from line 3 on line 18. E file your state taxes for free     Part II. E file your state taxes for free Limit on Elective Deferrals     4. E file your state taxes for free Maximum contribution: For 2013, enter $17,500 For 2014, enter $17,500 4. E file your state taxes for free     Note. E file your state taxes for free If you have at least 15 years of service with a qualifying organization, complete lines 5 through 17. E file your state taxes for free If not, enter zero (-0-) on line 16 and go to line 17. E file your state taxes for free     5. E file your state taxes for free Amount per year of service 5. E file your state taxes for free $ 5,000 6. E file your state taxes for free Enter your years of service 6. E file your state taxes for free   7. E file your state taxes for free Multiply line 5 by line 6 7. E file your state taxes for free   8. E file your state taxes for free Enter the total of all elective deferrals made for you by the qualifying organization for prior years 8. E file your state taxes for free   9. E file your state taxes for free Subtract line 8 from line 7. E file your state taxes for free If zero or less, enter zero (-0-) 9. E file your state taxes for free   10. E file your state taxes for free Maximum increase in limit for long service 10. E file your state taxes for free $15,000 11. E file your state taxes for free Enter the total of additional pre-tax elective deferrals made in prior years under the 15-year rule 11. E file your state taxes for free   12. E file your state taxes for free Enter the aggregate amount of all designated Roth contributions permitted for prior years under the 15-year rule 12. E file your state taxes for free   13. E file your state taxes for free Add line 11 and line 12 13. E file your state taxes for free   14. E file your state taxes for free Subtract line 13 from line 10 14. E file your state taxes for free   15. E file your state taxes for free Maximum additional contributions 15. E file your state taxes for free $ 3,000 16. E file your state taxes for free Enter the least of lines 9, 14, or 15. E file your state taxes for free This is your increase in the limit for long service 16. E file your state taxes for free   17. E file your state taxes for free Add lines 4 and 16. E file your state taxes for free This is your limit on elective deferrals 17. E file your state taxes for free     Part III. E file your state taxes for free Maximum Amount Contributable     18. E file your state taxes for free If you had only nonelective contributions, enter the amount from line 3. E file your state taxes for free This is your MAC. E file your state taxes for free    If you had only elective deferrals, enter the lesser of lines 3 or 17. E file your state taxes for free This is your MAC. E file your state taxes for free    If you had both elective deferrals and nonelective contributions, enter the amount from line 3. E file your state taxes for free This is your MAC. E file your state taxes for free (Use the amount on line 17 to determine if you have excess elective deferrals as explained in chapter 7. E file your state taxes for free ) 18. E file your state taxes for free   1If you participate in a 403(b) plan and a qualified plan, you must combine contributions made to your 403(b) account with contributions to a qualified plan and simplified employee pension plans of all corporations, partnerships, and sole proprietorships in which you have more than 50% control. E file your state taxes for free You must also combine the contributions made to all 403(b) accounts on your behalf by your employer. E file your state taxes for free Prev  Up  Next   Home   More Online Publications
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Diez Consejos Importantes del IRS para Temporada Tributaria

Consejo Tributario del IRS 2014-40SP 25 de marzo de 2014

La temporada de impuestos está a punto de terminar.  Pero usted puede hacer la temporada de impuestos más fácil si no espera hasta el último minuto. Aquí hay 10 consejos importantes de la temporada de impuestos:

  1. Reúna sus archivos.  Acumule todos los registros de impuestos que necesita para presentar su declaración de impuestos. Esto incluye recibos, cheques cancelados y los registros que corrobore los ingresos, deducciones o créditos tributarios que usted reclama en su declaración de impuestos. Guárdelos en un lugar seguro.

  2. Reporte todo sus ingresos. Usted tendrá que reportar sus ingresos (en inglés) de todas los Formularios W-2, salarios y declaración de impuestos, y Formularios 1099 como comprobante de ingresos cuando presente su declaración de impuestos.

  3. Obtenga respuestas. Use la herramienta interactiva Interactive Tax Assistant Tool (en inglés) en la página web del IRS para obtener respuestas a muchas de sus preguntas acerca de los créditos tributarios, deducciones y muchos temas más.

  4. Utilice Free File. Usted puede preparar y presentar electrónicamente su declaración de impuestos gratis con Free File del IRS, disponible exclusivamente en IRS.gov. Si su ingreso fue de $58,000 o menos, usted tiene derecho a usar el software de impuestos gratis. Si su ingreso es mayor, o si se siente cómodo haciendo su propia declaración, puede usar los formularios rellenables de Free File, la versión electrónica de los formularios en papel del IRS. Visite IRS.gov/freefile para ver sus opciones.

  5. Experimente e-file del IRS. La presentación electrónica es la mejor manera de presentar una declaración de impuestos. Es preciso, seguro y fácil. El año pasado, más de 122 millones de contribuyentes usaron e-file del IRS. Si usted debe impuestos, tiene la opción de presentar temprano y pagar antes del 15 de abril.

  6. Considere sus opciones de presentar. Usted tiene varias opciones para presentar su declaración de impuestos. Puede prepararlo usted mismo o ir a un preparador de impuestos. Puede ser elegible para la ayuda gratuita de cara a cara en un Programa de Ayuda Voluntaria a los Contribuyentes (VITA, por sus siglas en inglés) o de Asesoramiento Tributario para las Personas Mayores de Edad Avanzada, (TCE, por sus siglas en inglés). Considere sus opciones y elija el que más le convenga.

  7. Use el depósito directo. Combinando e-file con depósito directo (en inglés) es la forma más rápida y segura de obtener su reembolso de impuestos.

  8. Visite el sitio web del IRS 24/7. IRS.gov es un gran lugar para conseguir todo lo que necesita para presentar su declaración de impuestos. Visite la Central 1040 (en inglés) para las herramientas en línea, consejos de presentación, respuestas a las preguntas más frecuentes y los formularios y publicaciones del IRS. Obténgalos todos en cualquier momento, de día o de noche.

  9. Dele un vistazo al número 17. La Publicación 17SP, Sus Impuestos Federales por Ingresos, es un recurso completo en materia tributaria. Contiene información útil como por ejemplo,  si necesita presentar una declaración de impuestos y cómo elegir su estado civil al declarar.

  10. Revise su declaración. Los errores retrasan el recibir su reembolso de impuestos. Asegúrese de revisar todos los números de Seguro Social y los cálculos matemáticos en su declaración, ya que estos son los errores más comunes. Si surge un problema, recuerde que el IRS está aquí para ayudar. Comience con IRS.gov.

 

Recursos adicionales del IRS:

Vídeos de YouTube del IRS:

Podcasts del IRS:

 

Page Last Reviewed or Updated: 27-Mar-2014

The E File Your State Taxes For Free

E file your state taxes for free 15. E file your state taxes for free   Selling Your Home Table of Contents Reminder Introduction Useful Items - You may want to see: Main Home Figuring Gain or LossSelling Price Amount Realized Adjusted Basis Amount of Gain or Loss Dispositions Other Than Sales Determining Basis Excluding the GainMaximum Exclusion Ownership and Use Tests Reduced Maximum Exclusion Business Use or Rental of Home Reporting the SaleSeller-financed mortgage. E file your state taxes for free More information. E file your state taxes for free Special SituationsException for sales to related persons. E file your state taxes for free Recapturing (Paying Back) a Federal Mortgage Subsidy Reminder Home sold with undeducted points. E file your state taxes for free  If you have not deducted all the points you paid to secure a mortgage on your old home, you may be able to deduct the remaining points in the year of the sale. E file your state taxes for free See Mortgage ending early under Points in chapter 23. E file your state taxes for free Introduction This chapter explains the tax rules that apply when you sell your main home. E file your state taxes for free In most cases, your main home is the one in which you live most of the time. E file your state taxes for free If you sold your main home in 2013, 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). E file your state taxes for free See Excluding the Gain , later. E file your state taxes for free Generally, if you can exclude all the gain, you do not need to report the sale on your tax return. E file your state taxes for free If you have gain that cannot be excluded, it is taxable. E file your state taxes for free Report it on Form 8949, Sales and Other Dispositions of Capital Assets, and Schedule D (Form 1040). E file your state taxes for free You may also have to complete Form 4797, Sales of Business Property. E file your state taxes for free See Reporting the Sale , later. E file your state taxes for free If you have a loss on the sale, you generally cannot deduct it on your return. E file your state taxes for free However, you may need to report it. E file your state taxes for free See Reporting the Sale , later. E file your state taxes for free The following are main topics in this chapter. E file your state taxes for free Figuring gain or loss. E file your state taxes for free Basis. E file your state taxes for free Excluding the gain. E file your state taxes for free Ownership and use tests. E file your state taxes for free Reporting the sale. E file your state taxes for free Other topics include the following. E file your state taxes for free Business use or rental of home. E file your state taxes for free Recapturing a federal mortgage subsidy. E file your state taxes for free Useful Items - You may want to see: Publication 523 Selling Your Home 530 Tax Information for Homeowners 547 Casualties, Disasters, and Thefts Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 982 Reduction of Tax Attributes Due to Discharge of Indebtedness 8828 Recapture of Federal Mortgage Subsidy 8949 Sales and Other Dispositions of Capital Assets Main Home This section explains the term “main home. E file your state taxes for free ” Usually, the home you live in most of the time is your main home and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. E file your state taxes for free To exclude gain under the rules of this chapter, you in most cases must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale. E file your state taxes for free Land. E file your state taxes for free   If you sell the land on which your main home is located, but not the house itself, you cannot exclude any gain you have from the sale of the land. E file your state taxes for free However, if you sell vacant land used as part of your main home and that is adjacent to it, you may be able to exclude the gain from the sale under certain circumstances. E file your state taxes for free See Vacant land under Main Home in Publication 523 for more information. E file your state taxes for free Example. E file your state taxes for free You buy a piece of land and move your main home to it. E file your state taxes for free Then you sell the land on which your main home was located. E file your state taxes for free This sale is not considered a sale of your main home, and you cannot exclude any gain on the sale of the land. E file your state taxes for free More than one home. E file your state taxes for free   If you have more than one home, you can exclude gain only from the sale of your main home. E file your state taxes for free You must include in income gain from the sale of any other home. E file your state taxes for free If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time during the year. E file your state taxes for free Example 1. E file your state taxes for free You own two homes, one in New York and one in Florida. E file your state taxes for free From 2009 through 2013, you live in the New York home for 7 months and in the Florida residence for 5 months of each year. E file your state taxes for free In the absence of facts and circumstances indicating otherwise, the New York home is your main home. E file your state taxes for free You would be eligible to exclude the gain from the sale of the New York home but not of the Florida home in 2013. E file your state taxes for free Example 2. E file your state taxes for free You own a house, but you live in another house that you rent. E file your state taxes for free The rented house is your main home. E file your state taxes for free Example 3. E file your state taxes for free You own two homes, one in Virginia and one in New Hampshire. E file your state taxes for free In 2009 and 2010, you lived in the Virginia home. E file your state taxes for free In 2011 and 2012, you lived in the New Hampshire home. E file your state taxes for free In 2013, you lived again in the Virginia home. E file your state taxes for free Your main home in 2009, 2010, and 2013 is the Virginia home. E file your state taxes for free Your main home in 2011 and 2012 is the New Hampshire home. E file your state taxes for free You would be eligible to exclude gain from the sale of either home (but not both) in 2013. E file your state taxes for free Property used partly as your main home. E file your state taxes for free   If you use only part of the property as your main home, the rules discussed in this publication apply only to the gain or loss on the sale of that part of the property. E file your state taxes for free For details, see Business Use or Rental of Home , later. E file your state taxes for free Figuring Gain or Loss To figure the gain or loss on the sale of your main home, you must know the selling price, the amount realized, and the adjusted basis. E file your state taxes for free Subtract the adjusted basis from the amount realized to get your gain or loss. E file your state taxes for free     Selling price     − Selling expenses       Amount realized       Amount realized     − Adjusted basis       Gain or loss   Selling Price The selling price is the total amount you receive for your home. E file your state taxes for free It includes money and the fair market value of any other property or any other services you receive and all notes, mortgages or other debts assumed by the buyer as part of the sale. E file your state taxes for free Payment by employer. E file your state taxes for free   You may have to sell your home because of a job transfer. E file your state taxes for free If your employer pays you for a loss on the sale or for your selling expenses, do not include the payment as part of the selling price. E file your state taxes for free Your employer will include it as wages in box 1 of your Form W-2, and you will include it in your income on Form 1040, line 7. E file your state taxes for free Option to buy. E file your state taxes for free   If you grant an option to buy your home and the option is exercised, add the amount you receive for the option to the selling price of your home. E file your state taxes for free If the option is not exercised, you must report the amount as ordinary income in the year the option expires. E file your state taxes for free Report this amount on Form 1040, line 21. E file your state taxes for free Form 1099-S. E file your state taxes for free   If you received Form 1099-S, Proceeds From Real Estate Transactions, box 2 (Gross proceeds) should show the total amount you received for your home. E file your state taxes for free   However, box 2 will not include the fair market value of any services or property other than cash or notes you received or will receive. E file your state taxes for free Instead, box 4 will be checked to indicate your receipt or expected receipt of these items. E file your state taxes for free Amount Realized The amount realized is the selling price minus selling expenses. E file your state taxes for free Selling expenses. E file your state taxes for free   Selling expenses include: Commissions, Advertising fees, Legal fees, and Loan charges paid by the seller, such as loan placement fees or “points. E file your state taxes for free ” Adjusted Basis While you owned your home, you may have made adjustments (increases or decreases) to the basis. E file your state taxes for free This adjusted basis must be determined before you can figure gain or loss on the sale of your home. E file your state taxes for free For information on how to figure your home's adjusted basis, see Determining Basis , later. E file your state taxes for free Amount of Gain or Loss To figure the amount of gain or loss, compare the amount realized to the adjusted basis. E file your state taxes for free Gain on sale. E file your state taxes for free   If the amount realized is more than the adjusted basis, the difference is a gain and, except for any part you can exclude, in most cases is taxable. E file your state taxes for free Loss on sale. E file your state taxes for free   If the amount realized is less than the adjusted basis, the difference is a loss. E file your state taxes for free A loss on the sale of your main home cannot be deducted. E file your state taxes for free Jointly owned home. E file your state taxes for free   If you and your spouse sell your jointly owned home and file a joint return, you figure your gain or loss as one taxpayer. E file your state taxes for free Separate returns. E file your state taxes for free   If you file separate returns, each of you must figure your own gain or loss according to your ownership interest in the home. E file your state taxes for free Your ownership interest is generally determined by state law. E file your state taxes for free Joint owners not married. E file your state taxes for free   If you and a joint owner other than your spouse sell your jointly owned home, each of you must figure your own gain or loss according to your ownership interest in the home. E file your state taxes for free Each of you applies the rules discussed in this chapter on an individual basis. E file your state taxes for free Dispositions Other Than Sales Some special rules apply to other dispositions of your main home. E file your state taxes for free Foreclosure or repossession. E file your state taxes for free   If your home was foreclosed on or repossessed, you have a disposition. E file your state taxes for free See Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments, to determine if you have ordinary income, gain, or loss. E file your state taxes for free Abandonment. E file your state taxes for free   If you abandon your home, see Publication 4681 to determine if you have ordinary income, gain, or loss. E file your state taxes for free Trading (exchanging) homes. E file your state taxes for free   If you trade your old home for another home, treat the trade as a sale and a purchase. E file your state taxes for free Example. E file your state taxes for free You owned and lived in a home with an adjusted basis of $41,000. E file your state taxes for free A real estate dealer accepted your old home as a trade-in and allowed you $50,000 toward a new home priced at $80,000. E file your state taxes for free This is treated as a sale of your old home for $50,000 with a gain of $9,000 ($50,000 – $41,000). E file your state taxes for free If the dealer had allowed you $27,000 and assumed your unpaid mortgage of $23,000 on your old home, your sales price would still be $50,000 (the $27,000 trade-in allowed plus the $23,000 mortgage assumed). E file your state taxes for free Transfer to spouse. E file your state taxes for free   If you transfer your home to your spouse or you transfer it to your former spouse incident to your divorce, you in most cases have no gain or loss. E file your state taxes for free This is true even if you receive cash or other consideration for the home. E file your state taxes for free As a result, the rules in this chapter do not apply. E file your state taxes for free More information. E file your state taxes for free   If you need more information, see Transfer to spouse in Publication 523 and Property Settlements in Publication 504, Divorced or Separated Individuals. E file your state taxes for free Involuntary conversion. E file your state taxes for free   You have a disposition when your home is destroyed or condemned and you receive other property or money in payment, such as insurance or a condemnation award. E file your state taxes for free This is treated as a sale and you may be able to exclude all or part of any gain from the destruction or condemnation of your home, as explained later under Special Situations . E file your state taxes for free Determining Basis You need to know your basis in your home to figure any gain or loss when you sell it. E file your state taxes for free Your basis in your home is determined by how you got the home. E file your state taxes for free Generally, your basis is its cost if you bought it or built it. E file your state taxes for free If you got it in some other way (inheritance, gift, etc. E file your state taxes for free ), your basis is generally either its fair market value when you received it or the adjusted basis of the previous owner. E file your state taxes for free While you owned your home, you may have made adjustments (increases or decreases) to your home's basis. E file your state taxes for free The result of these adjustments is your home's adjusted basis, which is used to figure gain or loss on the sale of your home. E file your state taxes for free See Adjusted Basis , later. E file your state taxes for free You can find more information on basis and adjusted basis in chapter 13 of this publication and in Publication 523. E file your state taxes for free Cost As Basis The cost of property is the amount you paid for it in cash, debt obligations, other property, or services. E file your state taxes for free Purchase. E file your state taxes for free   If you bought your home, your basis is its cost to you. E file your state taxes for free This includes the purchase price and certain settlement or closing costs. E file your state taxes for free In most cases, your purchase price includes your down payment and any debt, such as a first or second mortgage or notes you gave the seller in payment for the home. E file your state taxes for free If you build, or contract to build, a new home, your purchase price can include costs of construction, as discussed in Publication 523. E file your state taxes for free Settlement fees or closing costs. E file your state taxes for free   When you bought your home, you may have paid settlement fees or closing costs in addition to the contract price of the property. E file your state taxes for free You can include in your basis some of the settlement fees and closing costs you paid for buying the home, but not the fees and costs for getting a mortgage loan. E file your state taxes for free A fee paid for buying the home is any fee you would have had to pay even if you paid cash for the home (that is, without the need for financing). E file your state taxes for free    Chapter 13 lists some of the settlement fees and closing costs that you can include in the basis of property, including your home. E file your state taxes for free It also lists some settlement costs that cannot be included in basis. E file your state taxes for free   Also see Publication 523 for additional items and a discussion of basis other than cost. E file your state taxes for free Adjusted Basis Adjusted basis is your cost or other basis increased or decreased by certain amounts. E file your state taxes for free To figure your adjusted basis, you can use Worksheet 1 in Publication 523. E file your state taxes for free Do not use Worksheet 1 if you acquired an interest in your home from a decedent who died in 2010 and whose executor filed Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent. E file your state taxes for free Increases to basis. E file your state taxes for free   These include the following. E file your state taxes for free Additions and other improvements that have a useful life of more than 1 year. E file your state taxes for free Special assessments for local improvements. E file your state taxes for free Amounts you spent after a casualty to restore damaged property. E file your state taxes for free Improvements. E file your state taxes for free   These add to the value of your home, prolong its useful life, or adapt it to new uses. E file your state taxes for free You add the cost of additions and other improvements to the basis of your property. E file your state taxes for free   For example, putting a recreation room or another bathroom in your unfinished basement, putting up a new fence, putting in new plumbing or wiring, putting on a new roof, or paving your unpaved driveway are improvements. E file your state taxes for free An addition to your house, such as a new deck, a sunroom, or a new garage, is also an improvement. E file your state taxes for free Repairs. E file your state taxes for free   These maintain your home in good condition but do not add to its value or prolong its life. E file your state taxes for free You do not add their cost to the basis of your property. E file your state taxes for free   Examples of repairs include repainting your house inside or outside, fixing your gutters or floors, repairing leaks or plastering, and replacing broken window panes. E file your state taxes for free Decreases to basis. E file your state taxes for free   These include the following. E file your state taxes for free Discharge of qualified principal residence indebtedness that was excluded from income. E file your state taxes for free Some or all of the cancellation of debt income that was excluded due to your bankruptcy or insolvency. E file your state taxes for free For details, see Publication 4681. E file your state taxes for free Gain you postponed from the sale of a previous home before May 7, 1997. E file your state taxes for free Deductible casualty losses. E file your state taxes for free Insurance payments you received or expect to receive for casualty losses. E file your state taxes for free Payments you received for granting an easement or right-of-way. E file your state taxes for free Depreciation allowed or allowable if you used your home for business or rental purposes. E file your state taxes for free Energy-related credits allowed for expenditures made on the residence. E file your state taxes for free (Reduce the increase in basis otherwise allowable for expenditures on the residence by the amount of credit allowed for those expenditures. E file your state taxes for free ) Adoption credit you claimed for improvements added to the basis of your home. E file your state taxes for free Nontaxable payments from an adoption assistance program of your employer you used for improvements you added to the basis of your home. E file your state taxes for free Energy conservation subsidy excluded from your gross income because you received it (directly or indirectly) from a public utility after 1992 to buy or install any energy conservation measure. E file your state taxes for free An energy conservation measure is an installation or modification primarily designed either to reduce consumption of electricity or natural gas or to improve the management of energy demand for a home. E file your state taxes for free District of Columbia first-time homebuyer credit (allowed on the purchase of a principal residence in the District of Columbia beginning on August 5, 1997 and before January 1, 2012). E file your state taxes for free General sales taxes (allowed beginning 2004 and ending before 2014) claimed as an itemized deduction on Schedule A (Form 1040) that were imposed on the purchase of personal property, such as a houseboat used as your home or a mobile home. E file your state taxes for free Discharges of qualified principal residence indebtedness. E file your state taxes for free   You may be able to exclude from gross income a discharge of qualified principal residence indebtedness. E file your state taxes for free This exclusion applies to discharges made after 2006 and before 2014. E file your state taxes for free If you choose to exclude this income, you must reduce (but not below zero) the basis of the principal residence by the amount excluded from your gross income. E file your state taxes for free   File Form 982 with your tax return. E file your state taxes for free See the form's instructions for detailed information. E file your state taxes for free Recordkeeping. E file your state taxes for free You should keep records to prove your home's adjusted basis. E file your state taxes for free Ordinarily, you must keep records for 3 years after the due date for filing your return for the tax year in which you sold your home. E file your state taxes for free But if you sold a home before May 7, 1997, and postponed tax on any gain, the basis of that home affects the basis of the new home you bought. E file your state taxes for free Keep records proving the basis of both homes as long as they are needed for tax purposes. E file your state taxes for free The records you should keep include: Proof of the home's purchase price and purchase expenses, Receipts and other records for all improvements, additions, and other items that affect the home's adjusted basis, Any worksheets or other computations you used to figure the adjusted basis of the home you sold, the gain or loss on the sale, the exclusion, and the taxable gain, Any Form 982 you filed to report any discharge of qualified principal residence indebtedness, Any Form 2119, Sale of Your Home, you filed to postpone gain from the sale of a previous home before May 7, 1997, and Any worksheets you used to prepare Form 2119, such as the Adjusted Basis of Home Sold Worksheet or the Capital Improvements Worksheet from the Form 2119 instructions, or other source of computations. E file your state taxes for free Excluding the Gain You may qualify to exclude from your income all or part of any gain from the sale of your main home. E file your state taxes for free This means that, if you qualify, you will not have to pay tax on the gain up to the limit described under Maximum Exclusion , next. E file your state taxes for free To qualify, you must meet the ownership and use tests described later. E file your state taxes for free You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. E file your state taxes for free You can use Worksheet 2 in Publication 523 to figure the amount of your exclusion and your taxable gain, if any. E file your state taxes for free If you have any taxable gain from the sale of your home, you may have to increase your withholding or make estimated tax payments. E file your state taxes for free See Publication 505, Tax Withholding and Estimated Tax. E file your state taxes for free Maximum Exclusion You can exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. E file your state taxes for free You meet the ownership test. E file your state taxes for free You meet the use test. E file your state taxes for free During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. E file your state taxes for free For details on gain allocated to periods of nonqualified use, see Periods of nonqualified use , later. E file your state taxes for free You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . E file your state taxes for free Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. E file your state taxes for free This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). E file your state taxes for free Exception. E file your state taxes for free   If you owned and lived in the property as your main home for less than 2 years, you can still claim an exclusion in some cases. E file your state taxes for free However, the maximum amount you may be able to exclude will be reduced. E file your state taxes for free See Reduced Maximum Exclusion , later. E file your state taxes for free Example 1—home owned and occupied for at least 2 years. E file your state taxes for free Mya bought and moved into her main home in September 2011. E file your state taxes for free She sold the home at a gain in October 2013. E file your state taxes for free During the 5-year period ending on the date of sale in October 2013, she owned and lived in the home for more than 2 years. E file your state taxes for free She meets the ownership and use tests. E file your state taxes for free Example 2—ownership test met but use test not met. E file your state taxes for free Ayden bought a home, lived in it for 6 months, moved out, and never occupied the home again. E file your state taxes for free He later sold the home for a gain. E file your state taxes for free He owned the home during the entire 5-year period ending on the date of sale. E file your state taxes for free He meets the ownership test but not the use test. E file your state taxes for free He cannot exclude any part of his gain on the sale unless he qualified for a reduced maximum exclusion (explained later). E file your state taxes for free Period of Ownership and Use The required 2 years of ownership and use during the 5-year period ending on the date of the sale do not have to be continuous nor do they both have to occur at the same time. E file your state taxes for free You meet the tests if you can show that you owned and lived in the property as your main home for either 24 full months or 730 days (365 × 2) during the 5-year period ending on the date of sale. E file your state taxes for free Temporary absence. E file your state taxes for free   Short temporary absences for vacations or other seasonal absences, even if you rent out the property during the absences, are counted as periods of use. E file your state taxes for free The following examples assume that the reduced maximum exclusion (discussed later) does not apply to the sales. E file your state taxes for free Example 1. E file your state taxes for free David Johnson, who is single, bought and moved into his home on February 1, 2011. E file your state taxes for free Each year during 2011 and 2012, David left his home for a 2-month summer vacation. E file your state taxes for free David sold the house on March 1, 2013. E file your state taxes for free Although the total time David used his home is less than 2 years (21 months), he meets the requirement and may exclude gain. E file your state taxes for free The 2-month vacations are short temporary absences and are counted as periods of use in determining whether David used the home for the required 2 years. E file your state taxes for free Example 2. E file your state taxes for free Professor Paul Beard, who is single, bought and moved into a house on August 18, 2010. E file your state taxes for free He lived in it as his main home continuously until January 5, 2012, when he went abroad for a 1-year sabbatical leave. E file your state taxes for free On February 6, 2013, 1 month after returning from the leave, Paul sold the house at a gain. E file your state taxes for free Because his leave was not a short temporary absence, he cannot include the period of leave to meet the 2-year use test. E file your state taxes for free He cannot exclude any part of his gain, because he did not use the residence for the required 2 years. E file your state taxes for free Ownership and use tests met at different times. E file your state taxes for free   You can meet the ownership and use tests during different 2-year periods. E file your state taxes for free However, you must meet both tests during the 5-year period ending on the date of the sale. E file your state taxes for free Example. E file your state taxes for free Beginning in 2002, Helen Jones lived in a rented apartment. E file your state taxes for free The apartment building was later converted to condominiums, and she bought her same apartment on December 3, 2010. E file your state taxes for free In 2011, Helen became ill and on April 14 of that year she moved to her daughter's home. E file your state taxes for free On July 12, 2013, while still living in her daughter's home, she sold her condominium. E file your state taxes for free Helen can exclude gain on the sale of her condominium because she met the ownership and use tests during the 5-year period from July 13, 2008, to July 12, 2013, the date she sold the condominium. E file your state taxes for free She owned her condominium from December 3, 2010, to July 12, 2013 (more than 2 years). E file your state taxes for free She lived in the property from July 13, 2008 (the beginning of the 5-year period), to April 14, 2011 (more than 2 years). E file your state taxes for free The time Helen lived in her daughter's home during the 5-year period can be counted toward her period of ownership, and the time she lived in her rented apartment during the 5-year period can be counted toward her period of use. E file your state taxes for free Cooperative apartment. E file your state taxes for free   If you sold stock as a tenant-stockholder in a cooperative housing corporation, the ownership and use tests are met if, during the 5-year period ending on the date of sale, you: Owned the stock for at least 2 years, and Lived in the house or apartment that the stock entitles you to occupy as your main home for at least 2 years. E file your state taxes for free Exceptions to Ownership and Use Tests The following sections contain exceptions to the ownership and use tests for certain taxpayers. E file your state taxes for free Exception for individuals with a disability. E file your state taxes for free   There is an exception to the use test if: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year during the 5-year period before the sale of your home. E file your state taxes for free Under this exception, you are considered to live in your home during any time within the 5-year period that you own the home and live in a facility (including a nursing home) licensed by a state or political subdivision to care for persons in your condition. E file your state taxes for free If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. E file your state taxes for free Previous home destroyed or condemned. E file your state taxes for free   For the ownership and use tests, you add the time you owned and lived in a previous home that was destroyed or condemned to the time you owned and lived in the replacement home on whose sale you wish to exclude gain. E file your state taxes for free This rule applies if any part of the basis of the home you sold depended on the basis of the destroyed or condemned home. E file your state taxes for free Otherwise, you must have owned and lived in the same home for 2 of the 5 years before the sale to qualify for the exclusion. E file your state taxes for free Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps. E file your state taxes for free   You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve on “qualified official extended duty” as a member of the uniformed services or Foreign Service of the United States, or as an employee of the intelligence community. E file your state taxes for free You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve outside the United States either as an employee of the Peace Corps on "qualified official extended duty" or as an enrolled volunteer or volunteer leader of the Peace Corps. E file your state taxes for free This means that you may be able to meet the 2-year use test even if, because of your service, you did not actually live in your home for at least the required 2 years during the 5-year period ending on the date of sale. E file your state taxes for free   If this helps you qualify to exclude gain, you can choose to have the 5-year test period suspended by filing a return for the year of sale that does not include the gain. E file your state taxes for free For more information about the suspension of the 5-year test period, see Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps in Publication 523. E file your state taxes for free Married Persons If you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use tests, you can exclude up to $250,000 of the gain. E file your state taxes for free (But see Special rules for joint returns , next. E file your state taxes for free ) Special rules for joint returns. E file your state taxes for free   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. E file your state taxes for free You are married and file a joint return for the year. E file your state taxes for free Either you or your spouse meets the ownership test. E file your state taxes for free Both you and your spouse meet the use test. E file your state taxes for free During the 2-year period ending on the date of the sale, neither you nor your spouse excluded gain from the sale of another home. E file your state taxes for free If either spouse does not satisfy all these requirements, the maximum exclusion that can be claimed by the couple is the total of the maximum exclusions that each spouse would qualify for if not married and the amounts were figured separately. E file your state taxes for free For this purpose, each spouse is treated as owning the property during the period that either spouse owned the property. E file your state taxes for free Example 1—one spouse sells a home. E file your state taxes for free Emily sells her home in June 2013 for a gain of $300,000. E file your state taxes for free She marries Jamie later in the year. E file your state taxes for free She meets the ownership and use tests, but Jamie does not. E file your state taxes for free Emily can exclude up to $250,000 of gain on a separate or joint return for 2013. E file your state taxes for free The $500,000 maximum exclusion for certain joint returns does not apply because Jamie does not meet the use test. E file your state taxes for free Example 2—each spouse sells a home. E file your state taxes for free The facts are the same as in Example 1 except that Jamie also sells a home in 2013 for a gain of $200,000 before he marries Emily. E file your state taxes for free He meets the ownership and use tests on his home, but Emily does not. E file your state taxes for free Emily can exclude $250,000 of gain and Jamie can exclude $200,000 of gain on the respective sales of their individual homes. E file your state taxes for free However, Emily cannot use Jamie's unused exclusion to exclude more than $250,000 of gain. E file your state taxes for free Therefore, Emily and Jamie must recognize $50,000 of gain on the sale of Emily's home. E file your state taxes for free The $500,000 maximum exclusion for certain joint returns does not apply because Emily and Jamie do not both meet the use test for the same home. E file your state taxes for free Sale of main home by surviving spouse. E file your state taxes for free   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. E file your state taxes for free   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. E file your state taxes for free The sale or exchange took place after 2008. E file your state taxes for free The sale or exchange took place no more than 2 years after the date of death of your spouse. E file your state taxes for free You have not remarried. E file your state taxes for free You and your spouse met the use test at the time of your spouse's death. E file your state taxes for free You or your spouse met the ownership test at the time of your spouse's death. E file your state taxes for free Neither you nor your spouse excluded gain from the sale of another home during the last 2 years. E file your state taxes for free Example. E file your state taxes for free   Harry owned and used a house as his main home since 2009. E file your state taxes for free Harry and Wilma married on July 1, 2013, and from that date they use Harry's house as their main home. E file your state taxes for free Harry died on August 15, 2013, and Wilma inherited the property. E file your state taxes for free Wilma sold the property on September 3, 2013, at which time she had not remarried. E file your state taxes for free Although Wilma owned and used the house for less than 2 years, Wilma is considered to have satisfied the ownership and use tests because her period of ownership and use includes the period that Harry owned and used the property before death. E file your state taxes for free Home transferred from spouse. E file your state taxes for free   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. E file your state taxes for free Use of home after divorce. E file your state taxes for free   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. E file your state taxes for free Reduced Maximum Exclusion If you fail to meet the requirements to qualify for the $250,000 or $500,000 exclusion, you may still qualify for a reduced exclusion. E file your state taxes for free This applies to those who: Fail to meet the ownership and use tests, or Have used the exclusion within 2 years of selling their current home. E file your state taxes for free In both cases, to qualify for a reduced exclusion, the sale of your main home must be due to one of the following reasons. E file your state taxes for free A change in place of employment. E file your state taxes for free Health. E file your state taxes for free Unforeseen circumstances. E file your state taxes for free Unforeseen circumstances. E file your state taxes for free   The sale of your main home is because of an unforeseen circumstance if your primary reason for the sale is the occurrence of an event that you could not reasonably have anticipated before buying and occupying your main home. E file your state taxes for free   See Publication 523 for more information and to use Worksheet 3 to figure your reduced maximum exclusion. E file your state taxes for free Business Use or Rental of Home You may be able to exclude gain from the sale of a home you have used for business or to produce rental income. E file your state taxes for free But you must meet the ownership and use tests. E file your state taxes for free Periods of nonqualified use. E file your state taxes for free   In most cases, gain from the sale or exchange of your main home will not qualify for the exclusion to the extent that the gains are allocated to periods of nonqualified use. E file your state taxes for free Nonqualified use is any period after 2008 during which neither you nor your spouse (or your former spouse) used the property as a main home with the following exceptions. E file your state taxes for free Exceptions. E file your state taxes for free   A period of nonqualified use does not include: Any portion of the 5-year period ending on the date of the sale or exchange after the last date you (or your spouse) use the property as a main home; Any period (not to exceed an aggregate period of 10 years) during which you (or your spouse) are serving on qualified official extended duty: As a member of the uniformed services; As a member of the Foreign Service of the United States; or As an employee of the intelligence community; and Any other period of temporary absence (not to exceed an aggregate period of 2 years) due to change of employment, health conditions, or such other unforeseen circumstances as may be specified by the IRS. E file your state taxes for free The gain resulting from the sale of the property is allocated between qualified and nonqualified use periods based on the amount of time the property was held for qualified and nonqualified use. E file your state taxes for free Gain from the sale or exchange of a main home allocable to periods of qualified use will continue to qualify for the exclusion for the sale of your main home. E file your state taxes for free Gain from the sale or exchange of property allocable to nonqualified use will not qualify for the exclusion. E file your state taxes for free Calculation. E file your state taxes for free   To figure the portion of the gain allocated to the period of nonqualified use, multiply the gain by the following fraction:   Total nonqualified use during the period of ownership after 2008      Total period of ownership     This calculation can be found in Worksheet 2, line 10, in Publication 523. E file your state taxes for free Example 1. E file your state taxes for free On May 23, 2007, Amy, who is unmarried for all years in this example, bought a house. E file your state taxes for free She moved in on that date and lived in it until May 31, 2009, when she moved out of the house and put it up for rent. E file your state taxes for free The house was rented from June 1, 2009, to March 31, 2011. E file your state taxes for free Amy claimed depreciation deductions in 2009 through 2011 totaling $10,000. E file your state taxes for free Amy moved back into the house on April 1, 2011, and lived there until she sold it on January 31, 2013, for a gain of $200,000. E file your state taxes for free During the 5-year period ending on the date of the sale (January 31, 2008-January 31, 2013), Amy owned and lived in the house for more than 2 years as shown in the following table. E file your state taxes for free Five Year Period Used as  Home Used as  Rental 1/31/08 – 5/31/09 16 months       6/1/09 – 3/31/11   22 months 4/1/11 – 1/31/13 22 months         38 months 22 months During the period Amy owned the house (2,080 days), her period of nonqualified use was 668 days. E file your state taxes for free Amy divides 668 by 2,080 and obtains a decimal (rounded to at least three decimal places) of 0. E file your state taxes for free 321. E file your state taxes for free To figure her gain attributable to the period of nonqualified use, she multiplies $190,000 (the gain not attributable to the $10,000 depreciation deduction) by 0. E file your state taxes for free 321. E file your state taxes for free Because the gain attributable to periods of nonqualified use is $60,990, Amy can exclude $129,010 of her gain. E file your state taxes for free Example 2. E file your state taxes for free William owned and used a house as his main home from 2007 through 2010. E file your state taxes for free On January 1, 2011, he moved to another state. E file your state taxes for free He rented his house from that date until April 30, 2013, when he sold it. E file your state taxes for free During the 5-year period ending on the date of sale (May 1, 2008-April 30, 2013), William owned and lived in the house for more than 2 years. E file your state taxes for free He must report the sale on Form 4797 because it was rental property at the time of sale. E file your state taxes for free Because the period of nonqualified use does not include any part of the 5-year period after the last date William lived in the house, he has no period of nonqualified use. E file your state taxes for free Because he met the ownership and use tests, he can exclude gain up to $250,000. E file your state taxes for free However, he cannot exclude the part of the gain equal to the depreciation he claimed or could have claimed for renting the house, as explained next. E file your state taxes for free Depreciation after May 6, 1997. E file your state taxes for free   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. E file your state taxes for free If you can show by adequate records or other evidence that the depreciation allowed was less than the amount allowable, then you may limit the amount of gain recognized to the depreciation allowed. E file your state taxes for free See Publication 544 for more information. E file your state taxes for free Property used partly for business or rental. E file your state taxes for free   If you used property partly as a home and partly for business or to produce rental income, see Publication 523. E file your state taxes for free Reporting the Sale Do not report the 2013 sale of your main home on your tax return unless: You have a gain and do not qualify to exclude all of it, You have a gain and choose not to exclude it, or You received Form 1099-S. E file your state taxes for free If any of these conditions apply, report the entire gain or loss. E file your state taxes for free For details on how to report the gain or loss, see the Instructions for Schedule D (Form 1040) and the Instructions for Form 8949. E file your state taxes for free If you used the home for business or to produce rental income, you may have to use Form 4797 to report the sale of the business or rental part (or the sale of the entire property if used entirely for business or rental). E file your state taxes for free See Business Use or Rental of Home in Publication 523 and the Instructions for Form 4797. E file your state taxes for free Installment sale. E file your state taxes for free    Some sales are made under arrangements that provide for part or all of the selling price to be paid in a later year. E file your state taxes for free These sales are called “installment sales. E file your state taxes for free ” If you finance the buyer's purchase of your home yourself instead of having the buyer get a loan or mortgage from a bank, you probably have an installment sale. E file your state taxes for free You may be able to report the part of the gain you cannot exclude on the installment basis. E file your state taxes for free    Use Form 6252, Installment Sale Income, to report the sale. E file your state taxes for free Enter your exclusion on line 15 of Form 6252. E file your state taxes for free Seller-financed mortgage. E file your state taxes for free   If you sell your home and hold a note, mortgage, or other financial agreement, the payments you receive in most cases consist of both interest and principal. E file your state taxes for free You must separately report as interest income the interest you receive as part of each payment. E file your state taxes for free If the buyer of your home uses the property as a main or second home, you must also report the name, address, and social security number (SSN) of the buyer on line 1 of Schedule B (Form 1040A or 1040). E file your state taxes for free The buyer must give you his or her SSN, and you must give the buyer your SSN. E file your state taxes for free Failure to meet these requirements may result in a $50 penalty for each failure. E file your state taxes for free If either you or the buyer does not have and is not eligible to get an SSN, see Social Security Number in chapter 1. E file your state taxes for free More information. E file your state taxes for free   For more information on installment sales, see Publication 537, Installment Sales. E file your state taxes for free Special Situations The situations that follow may affect your exclusion. E file your state taxes for free Sale of home acquired in a like-kind exchange. E file your state taxes for free   You cannot claim the exclusion if: You acquired your home in a like-kind exchange (also known as a section 1031 exchange), or your basis in your home is determined by reference to the basis of the home in the hands of the person who acquired the property in a like-kind exchange (for example, you received the home from that person as a gift), and You sold the home during the 5-year period beginning with the date your home was acquired in the like-kind exchange. E file your state taxes for free Gain from a like-kind exchange is not taxable at the time of the exchange. E file your state taxes for free This means that gain will not be taxed until you sell or otherwise dispose of the property you receive. E file your state taxes for free To defer gain from a like-kind exchange, you must have exchanged business or investment property for business or investment property of a like kind. E file your state taxes for free For more information about like-kind exchanges, see Publication 544, Sales and Other Dispositions of Assets. E file your state taxes for free Home relinquished in a like-kind exchange. E file your state taxes for free   If you use your main home partly for business or rental purposes and then exchange the home for another property, see Publication 523. E file your state taxes for free Expatriates. E file your state taxes for free   You cannot claim the exclusion if the expatriation tax applies to you. E file your state taxes for free The expatriation tax applies to certain U. E file your state taxes for free S. E file your state taxes for free citizens who have renounced their citizenship (and to certain long-term residents who have ended their residency). E file your state taxes for free For more information about the expatriation tax, see Expatriation Tax in chapter 4 of Publication 519, U. E file your state taxes for free S. E file your state taxes for free Tax Guide for Aliens. E file your state taxes for free Home destroyed or condemned. E file your state taxes for free   If your home was destroyed or condemned, any gain (for example, because of insurance proceeds you received) qualifies for the exclusion. E file your state taxes for free   Any part of the gain that cannot be excluded (because it is more than the maximum exclusion) can be postponed under the rules explained in: Publication 547, in the case of a home that was destroyed, or Publication 544, chapter 1, in the case of a home that was condemned. E file your state taxes for free Sale of remainder interest. E file your state taxes for free   Subject to the other rules in this chapter, you can choose to exclude gain from the sale of a remainder interest in your home. E file your state taxes for free If you make this choice, you cannot choose to exclude gain from your sale of any other interest in the home that you sell separately. E file your state taxes for free Exception for sales to related persons. E file your state taxes for free   You cannot exclude gain from the sale of a remainder interest in your home to a related person. E file your state taxes for free Related persons include your brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. E file your state taxes for free ), and lineal descendants (children, grandchildren, etc. E file your state taxes for free ). E file your state taxes for free Related persons also include certain corporations, partnerships, trusts, and exempt organizations. E file your state taxes for free Recapturing (Paying Back) a Federal Mortgage Subsidy If you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. E file your state taxes for free You recapture the benefit by increasing your federal income tax for the year of the sale. E file your state taxes for free You may have to pay this recapture tax even if you can exclude your gain from income under the rules discussed earlier; that exclusion does not affect the recapture tax. E file your state taxes for free Loans subject to recapture rules. E file your state taxes for free   The recapture applies to loans that: Came from the proceeds of qualified mortgage bonds, or Were based on mortgage credit certificates. E file your state taxes for free The recapture also applies to assumptions of these loans. E file your state taxes for free When recapture applies. E file your state taxes for free   Recapture of the federal mortgage subsidy applies only if you meet both of the following conditions. E file your state taxes for free You sell or otherwise dispose of your home at a gain within the first 9 years after the date you close your mortgage loan. E file your state taxes for free Your income for the year of disposition is more than that year's adjusted qualifying income for your family size for that year (related to the income requirements a person must meet to qualify for the federally subsidized program). E file your state taxes for free When recapture does not apply. E file your state taxes for free   Recapture does not apply in any of the following situations. E file your state taxes for free Your mortgage loan was a qualified home improvement loan (QHIL) of not more than $15,000 used for alterations, repairs, and improvements that protect or improve the basic livability or energy efficiency of your home. E file your state taxes for free Your mortgage loan was a QHIL of not more than $150,000 in the case of a QHIL used to repair damage from Hurricane Katrina to homes in the hurricane disaster area; a QHIL funded by a qualified mortgage bond that is a qualified Gulf Opportunity Zone Bond; or a QHIL for an owner-occupied home in the Gulf Opportunity Zone (GO Zone), Rita GO Zone, or Wilma GO Zone. E file your state taxes for free For more information, see Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma. E file your state taxes for free Also see Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas. E file your state taxes for free The home is disposed of as a result of your death. E file your state taxes for free You dispose of the home more than 9 years after the date you closed your mortgage loan. E file your state taxes for free You transfer the home to your spouse, or to your former spouse incident to a divorce, where no gain is included in your income. E file your state taxes for free You dispose of the home at a loss. E file your state taxes for free Your home is destroyed by a casualty, and you replace it on its original site within 2 years after the end of the tax year when the destruction happened. E file your state taxes for free The replacement period is extended for main homes destroyed in a federally declared disaster area, a Midwestern disaster area, the Kansas disaster area, and the Hurricane Katrina disaster area. E file your state taxes for free For more information, see Replacement Period in Publication 547. E file your state taxes for free You refinance your mortgage loan (unless you later meet the conditions listed previously under When recapture applies ). E file your state taxes for free Notice of amounts. E file your state taxes for free   At or near the time of settlement of your mortgage loan, you should receive a notice that provides the federally subsidized amount and other information you will need to figure your recapture tax. E file your state taxes for free How to figure and report the recapture. E file your state taxes for free    The recapture tax is figured on Form 8828. E file your state taxes for free If you sell your home and your mortgage is subject to recapture rules, you must file Form 8828 even if you do not owe a recapture tax. E file your state taxes for free Attach Form 8828 to your Form 1040. E file your state taxes for free For more information, see Form 8828 and its instructions. E file your state taxes for free Prev  Up  Next   Home   More Online Publications