Category: Tax Questions
Schedule D - Sale of Main Home
- You must have owned the home for at least 2 years - (the ownership test)
- You must have lived in the home as your main home for at least 2 years - (the use test) - 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 have to occur at the same time. A taxpayer meets the tests if they can show that they owned and lived in the property as their main home for either 24 full months or 730 days (365 × 2) during the 5-year period ending on the date of sale.
Reporting the Sale
Do not report the sale of a main home on a tax return unless the taxpayer has a gain and at least part of it is taxable. Report any taxable gain on Schedule D (Form 1040).
Reporting the Gain
During the 2-year period ending on the date of the sale, you must not have excluded any gain from the sale of another home. If a taxpayer has a gain from the sale of their main home, they may be able to exclude up to $250,000 of the gain from their income ($500,000 on a joint return in most cases).
Reporting the Loss ;- You cannot deduct a loss from the sale of your main home. More Than One Home If you have more than one home, you can exclude gain only from the sale of your main home. You must pay tax on the gain from selling any other home. 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.
- Example One: You own and live in a house in the city. You also own a beach house, which you use during the summer months. The house in the city is your main home; the beach house is not.
- Example Two: You own a house, but you live in another house that you rent. The rented house is your main home.
To display instructions for accessing the Sale of Main Home Worksheet for Schedule D in the tax program click here.
From the Main Menu of the Tax Return (Form 1040) select:
- Income Menu
- Capital Gain/Loss (Sch D)
- Choose the option 'Other'
- Sale of Main Home Worksheet
- Answer the questions to determine the amount, if any, that is to be reported on the tax return. If any part of the gain from the sale of the home is taxable, the amount will automatically carry back to the Schedule D. If none of the gain is taxable, the program will automatically exclude the gain from income.
NOTE: This is a guide on entering a Sale of Home into the TaxSlayer Pro program. This is not intended as tax advice. For additional information refer to the Additional Link below.
Last Updated: 8/24/2016