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taxmap/pubs/p523-000.htm#en_us_publink1000200587
Publication 523

 
Selling 
Your Home

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Future Developments(p1)


For the latest information about developments related to Publication 523, such as legislation enacted after it was published, go to www.irs.gov/pub523.

Reminders(p1)


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Change of address.(p1)
If you change your mailing address, be sure to notify the Internal Revenue Service (IRS) using Form 8822, Change of Address. Mail it to the Internal Revenue Service Center for your old address. (Addresses for the Service Centers are on the back of the form.)
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Home sold with undeducted points.(p2)
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 sale. See Points in Part I of Publication 936, Home Mortgage Interest Deduction.
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Photographs of missing children.(p2)
The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

taxmap/pubs/p523-000.htm#en_us_publink1000270286Introduction

This publication explains the tax rules that apply when you sell your main home. In most cases, your main home is the one in which you live most of the time.
If you sold your main home in 2012, 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). See Excluding the Gain, later. Generally, if you can exclude all the gain, you do not need to report the sale on your tax return.
If you have gain that cannot be excluded, it is taxable. Report it on Form 8949 and Schedule D (Form 1040). You may also have to complete Form 4797, Sales of Business Property. See Reporting the Sale, later.
If you have a loss on the sale, you generally cannot deduct it on your return. However, you may need to report it. See Reporting the Sale, later.
The main topics in this publication are: Other topics include:
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Worksheets.(p2)

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Near the end of this publication you will find worksheets you can use to figure your gain (or loss) and your exclusion. Use Worksheet 1 to figure the adjusted basis of the home you sold. Use Worksheet 2 to figure the gain (or loss), the exclusion, and the taxable gain (if any) on the sale. If you do not qualify for the maximum exclusion, use Worksheet 3 to figure your reduced maximum exclusion.
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Date of sale.(p2)

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If you received a Form 1099-S, Proceeds From Real Estate Transactions, the date of sale should be shown in box 1. If you did not receive this form, the date of sale is the earlier of (a) the date title transferred or (b) the date the economic burdens and benefits of ownership shifted to the buyer. In most cases, these dates are the same.
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What is not covered in this publication.(p2)

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This publication does not cover the sale of rental property, second homes, or vacation homes. For information on how to report any gain or loss from those sales, see Publication 544, Sales and Other Dispositions of Assets.
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Comments and suggestions.(p2)

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We welcome your comments about this publication and your suggestions for future editions.
You can write to us at the following address:

Internal Revenue Service
Individual and Specialty Forms and Publications Branch
SE:W:CAR:MP:T:I
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224


We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.
You can email us at taxforms@irs.gov. Please put "Publications Comment" on the subject line. You can also send us comments from www.irs.gov/formspubs/. Select "Comment on Tax Forms and Publications" under "More Information."
Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.
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Ordering forms and publications.(p2)
Visit www.irs.gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received.

Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613


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Tax questions.(p2)
If you have a tax question, check the information available on IRS.gov or call 1-800-829-1040. We cannot answer tax questions sent to either of the above addresses.

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Useful items

You may want to see:


Publication
 521  Moving Expenses
 527  Residential Rental Property (Including Rental of Vacation Homes)
 530  Tax Information for Homeowners
 544  Sales and Other Dispositions of Assets
 547  Casualties, Disasters, and Thefts
 551  Basis of Assets
 587  Business Use of Your Home
 936  Home Mortgage Interest Deduction
 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals)
Form (and Instructions)
 Schedule D (Form 1040) : Capital Gains and Losses
 982: Reduction of Tax Attributes Due to Discharge of Indebtedness (And Section 1082 Basis Adjustment)
 1040X : Amended U.S. Individual Income Tax Return
 1099-S: Proceeds From Real Estate Transactions
 4797: Sales of Business Property
 8822 : Change of Address
 8828 : Recapture of Federal Mortgage Subsidy
 8949: Sales and Other Dispositions of Capital Assets
See How To Get Tax Help, near the end of this publication, for information about getting these publications and forms.
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Main Home(p3)

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This section explains the term "main home." Usually, the home you live in most of the time is your main home and can be a:To exclude gain under the rules in this publication, 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.
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Land.(p3)

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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.
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Example.(p3)

You buy a piece of land and move your main home to it. Then, you sell the land on which your main home was located. This sale is not considered a sale of your main home, and you cannot exclude any gain on the sale of the land.
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Vacant land.(p3)
The sale of vacant land is not a sale of your main home unless:If these requirements are met, the sale of the home and the sale of the vacant land are treated as one sale and only one maximum exclusion can be applied to any gain. See Excluding the Gain, later.
Deposit
The destruction of your home is treated as a sale of your home. As a result, you may be able to meet these requirements if you sell vacant land used as a part of your main home within 2 years from the date of the destruction of your main home. For information, see Publication 547.
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More than one home.(p3)

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If you have more than one home, you can exclude gain only from the sale of your main home. You must include in income the gain from the sale of any other home. If you have two homes and live in each of them, your main home is ordinarily the one you live in most of the time during the year.
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Example 1.(p3)

You own two homes, one in New York and one in Florida. From 2008 through 2012, you live in the New York home for 7 months and in the Florida residence for 5 months of each year. In the absence of facts and circumstances indicating otherwise, the New York home is your main home. You would be eligible to exclude the gain from the sale of the New York home but not of the Florida home in 2012.
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Example 2.(p3)

You own a house, but you live in another house that you rent. The rented house is your main home.
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Example 3.(p3)

You own two homes, one in Virginia and one in New Hampshire. In 2008 and 2009, you lived in the Virginia home. In 2010 and 2011, you lived in the New Hampshire home. In 2012, you lived again in the Virginia home. Your main home in 2008, 2009, and 2012 is the Virginia home. Your main home in 2010 and 2011 is the New Hampshire home. You would be eligible to exclude gain from the sale of either home (but not both) in 2012.
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Factors used to determine main home.(p3)
In addition to the amount of time you live in each home, other factors are relevant in determining which home is your main home. Those factors include the following.
  1. Your place of employment.
  2. The location of your family members' main home.
  3. Your mailing address for bills and correspondence.
  4. The address listed on your:
    1. Federal and state tax returns,
    2. Driver's license,
    3. Car registration, and
    4. Voter registration card.
  5. The location of the banks you use.
  6. The location of recreational clubs and religious organizations of which you are a member.
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Property used partly as your main home.(p4)

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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. For details, see Business Use or Rental of Home, later.