REAL ESTATE CALCULATORS

 
The $250,000 / $500,000 Tax Exclusion
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  • If I sell my primary residence, what kind of taxes will I be liable to pay?

    In summary the IRS allows an exclusion of up to $250,000 for single individuals and $500,000 for married couples filing jointly on the sale of a principle residence.  The exclusion can usually be claimed only once every two years.  In order to qualify you must have owned and lived in the residence (as your primary residence) for two of the last five years before the sale. The ownership and use periods need not be concurrent and can consist of 24 months or 730 days.

    For homeowners that are not married the exclusion of up to $250,000 each would apply as long as both individuals meet the qualifying exclusion requirements.

    The tax law provides for an exemption of the two year rules for use and ownership, when the primary reason for the sale is health, change in place of employment, or “unforeseen circumstance” as defined or determined by IRS regulation.

    This information comes from the www.irs.gov website and can be found under http://www.irs.gov/newsroom/article/0,,id=105042,00.html titled, “IRS Issues Home Sales Exclusions”.

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