Selling Your Home

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Selling Your Home

An individual may exclude from income up to $250,000 of gain ($500,000 on a joint return in most situations) realized on the sale or exchange of a residence. The individual must have owned and occupied the residence as a principal residence for an aggregate of at least two of the five years before the sale or exchange. The exclusion may not be used more frequently than once every two years. The required two years of ownership and use need not be continuous. The test is met if the individual owned and used the property as a principal residence for a total of 730 days (365 days X 2) during the five-year period before the sale. Short temporary absences for vacations or seasonal absences are counted as periods of use, even if the taxpayer rents out the property during those periods.

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