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Publication 523
taxmap/pubs/p523-010.htm#en_us_publink1000200855

Worksheets(p28)

rule
The worksheets on the following pages are provided to help you figure the adjusted basis of your home; your gain or (loss), exclusion, and taxable gain on the sale of your home; and the reduced maximum exclusion. Keep any completed worksheets with your tax records; do not submit them with your tax return.
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Worksheet 1 Instructions. Adjusted Basis of Home Sold

If you use Worksheet 1 to figure the adjusted basis of your home, follow these instructions. DO NOT use this worksheet to determine your basis if you acquired an interest in your home from a decedent who died in 2010 and whose executor filed Form 8939.

IF... THEN...
you inherited your home from a decedent who died either before or after 2010 or from a decedent who died in 2010 and whose executor did not file Form 8939 1skip lines 1–4 of the worksheet.
2find your basis using the rules under Home received as inheritance. Enter this amount on line 5.
3fill out lines 6–13.
you received your home as a gift1read Home received as gift and enter on lines 1 and 3 of the worksheet either the donor's adjusted basis or the home's fair market value at the time of the gift, whichever is appropriate.
2if you can add any federal gift tax to your basis, enter that amount on line 5.
3fill out lines 6–13.
you received your home as a trade for other property1enter on line 1 of the worksheet the fair market value of the other property at the time of the trade. (But if you received your home as a trade for your previous home before May 7, 1997, and had a gain on the trade that you postponed using Form 2119, enter on line 1 of the worksheet the adjusted basis of the new home from that Form 2119.)
2fill out lines 2–13.
you built your home1add the purchase price of the land and the cost of building the home. See Construction. Enter that total on line 1 of the worksheet. (However, if you filed a Form 2119 to postpone gain on the sale of a previous home before May 7, 1997, enter on line 1 of the worksheet the adjusted basis of the new home from that Form 2119.)
2fill out lines 2–13.
you received your home from your spouse after July 18, 19841skip lines 1–4 of the worksheet.
2enter on line 5 your spouse's adjusted basis in the home just before you received it.
3fill out lines 6–13, including adjustments to basis only for events after the transfer.
you owned a home jointly with your spouse, who transferred his or her interest in the home to you after July 18, 1984 fill out one worksheet, including adjustments to basis for events both before and after the transfer.
you received your home from your spouse before July 19, 19841skip lines 1–4 of the worksheet.
2enter on line 5 the home's fair market value at the time you received it.
3fill out lines 6–13, including adjustments to basis only for events after the transfer.
you owned a home jointly with your spouse, who transferred his or her interest in the home to you before July 19, 19841fill out lines 1–13 of the worksheet, including adjustments to basis only for events before the transfer.
2multiply the amount on line 13 by 50% (.50) to get the adjusted basis of your half-interest at the time of the transfer.
3multiply the fair market value of the home at the time of the transfer by 50% (.50). In most cases, this is the basis of the half-interest that your spouse owned.
4add the amounts from steps 2 and 3 and enter the total on line 5 of a second worksheet.
5complete lines 6–13 on the second worksheet, including adjustments to basis only for events after the transfer.
you owned your home jointly with a nonspouse1fill out lines 1–13 of the worksheet.
2multiply the amount on line 13 by your percentage of ownership to get the adjusted basis of your part-interest.
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Worksheet 1 Instructions. Adjusted Basis of Home Sold
(Continued)

IF... THEN...
you owned your home jointly with your spouse who died before 2010 and before the sale1fill out lines 1–13 of the worksheet, including adjustments to basis only for events before your spouse's death.
2multiply the amount on line 13 by 50% (.50) to get the adjusted basis of your half-interest on the date of death.
3multiply the fair market value on the date of death (or later alternate valuation used for estate or inheritance tax) by 50% (.50). This is the basis for your spouse's half-interest.
4add the amounts from steps 2 and 3 and enter the total on line 5 of a second worksheet.
5complete lines 6–13 on the second worksheet, including adjustments to basis only for events after your spouse's death.
you owned your home jointly with your spouse who died before 2010 and before the sale, and your permanent legal home is in a community property state 1skip lines 1–4 of the worksheet.
2enter the basis of the home on line 5. In most cases, this is the total fair market value of the home at the time of death. (See Community property.)
3fill out lines 6–13, including adjustments to basis only for events after your spouse's death.
you owned your home jointly with a nonspouse who died before 2010 and before the sale1fill out lines 1–13 of the worksheet, including adjustments to basis only for events before the co-owner's death.
2multiply the amount on line 13 by your percentage of ownership to get the adjusted basis of your part-interest on the date of death.
3multiply the fair market value on the date of death (or later alternate valuation used for estate or inheritance tax) by the co-owner's percentage of ownership. This is the basis for the co-owner's part-interest.
4add the amounts from steps 2 and 3 and enter the total on line 5 of a second worksheet.
5complete lines 6–13 on the second worksheet, including adjustments to basis only for events after the co-owner's death.
your home was ever damaged as the result of a casualty1in addition to lines 6–13, including other lines of the worksheet you may need to fill out, on line 8 enter any amounts you spent to restore the home to its condition before the casualty.
2on line 11 enter:
  • any insurance reimbursements you received (or expect to receive) for the loss, and
  • any deductible casualty losses not covered by insurance.
   
none of these items apply fill out entire worksheet.
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Worksheet 1. Adjusted Basis of Home Sold

Caution: See the Worksheet 1 Instructions before you use this worksheet. 
1. Enter the purchase price of the home sold. (If you filed Form 2119 when you originally acquired that home to postpone gain on the sale of a previous home before May 7, 1997, enter the adjusted basis of the new home
from that Form 2119.)
1. 
2. Seller-paid points for home bought after 1990 (see Seller-paid points). Do not include any seller-paid points
you already subtracted to arrive at the amount entered on line 1
2. 
3. Subtract line 2 from line 13. 
4. Settlement fees or closing costs (see Settlement fees or closing costs). If line 1
includes the adjusted basis of the new home from Form 2119, skip lines 4a–4g and 5;
go to line 6.
     
 a.Abstract and recording fees4a.   
 b.Legal fees (including fees for title search and preparing documents)4b.   
 c.Survey fees4c.   
 d.Title insurance4d.   
 e.Transfer or stamp taxes4e.   
 f.Amounts that the seller owed that you agreed to pay (back taxes or interest,
recording or mortgage fees, and sales commissions)

4f.
   
 g.Other4g.   
5. Add lines 4a through 4g5.  
6. Cost of additions and improvements. Do not include any additions and improvements included on line 16. 
7. Special tax assessments paid for local improvements, such as streets and sidewalks7. 
8. Other increases to basis8. 
9. Add lines 3, 5, 6, 7, and 89. 
10. Depreciation allowed or allowable, related to the business use or rental of the home10.   
11. Other decreases to basis (see Decreases to Basis). Do not include any postponed gain that reduced the adjusted basis of the new home reported from Form 2119 on line 1 11.   
12. Add lines 10 and 1112. 
13. Adjusted basis of home sold. Subtract line 12 from line 9. Enter here and on Worksheet 2, line 4 13. 
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Worksheet 2. Taxable Gain on Sale of Home

Part 1. Gain or (Loss) on Sale   
1. Selling price of home1. 
2. Selling expenses (including commissions, advertising and legal fees, and seller-paid loan charges)2. 
3. Subtract line 2 from line 1. This is the amount realized3. 
4. Adjusted basis of home sold (from Worksheet 1, line 13)4. 
5. Gain or (loss) on the sale. Subtract line 4 from line 3. If this is a loss, stop here 5. 
Part 2. Exclusion and Taxable Gain   
6. Enter any depreciation allowed or allowable on the property for periods after May 6, 1997. If none, enter -0-6. 
7. Subtract line 6 from line 5. If the result is less than zero, enter -0-7. 
8. Aggregate number of days of nonqualified use after 2008. If none, enter -0-.
If line 8 is equal to zero, skip to line 12 and enter the amount from line 7 on line 12
8. 
9. Number of days taxpayer owned the property9. 
10. Divide the amount on line 8 by the amount on line 9. Enter the result as a decimal (rounded to at least 3 places). But do not enter an amount greater than 1.00 10. 
11. Gain allocated to nonqualified use. (Line 7 multiplied by line 10)11. 
12. Gain eligible for exclusion. Subtract line 11 from line 712. 
13. If you qualify to exclude gain on the sale, enter your maximum exclusion (see Maximum Exclusion).
If you qualify for a reduced maximum exclusion, enter the amount from Worksheet 3, line 7. If you do
not qualify to exclude gain, enter -0-
13. 
14. Exclusion. Enter the smaller of line 12 or line 13 14. 
15. Taxable gain. Subtract line 14 from line 5. Report your taxable gain as described under Reporting the Sale.
If the amount on line 6 is more than zero, complete line 16
15. 
16. Enter the smaller of line 6 or line 15. Enter this amount on line 12 of the Unrecaptured Section 1250 Gain
Worksheet in the instructions for Schedule D (Form 1040)
16.
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Worksheet 3. Reduced Maximum Exclusion

Caution: Complete this worksheet only if you qualify for a reduced maximum exclusion (see Reduced Maximum Exclusion). Complete column (a).(a)
You
(b)
Your Spouse
 
1.Maximum amount1.$250,000$250,000 
2 a.Enter the number of days (or months) that you used the property as a main home during the 5-year period* ending on the date of sale
2a.
 
  b.Enter the number of days (or months) that you owned the property during the 5-year period* ending on the date of sale. If you used days on line 2a, you also must use days on this line and on lines 3 and 5. If you used months on line 2a, you also must use months on this line and on lines 3 and 5. (If married filing jointly and one spouse owned the property longer than the other spouse, both spouses are treated as owning the property for the longer period.)


 b.
 
  c.Enter the smaller of line 2a or 2b c. 
3.Have you (or your spouse, if filing jointly) excluded gain from the sale of another
home during the 2-year period ending on the date of this sale?

No. Skip line 3 and enter the number of days (or months) from line 2c on line 4.
Yes. Enter the number of days (or months) between the date of the most recent sale of another home on which you excluded gain and the date of sale of this home



3.
 
4.Enter the smaller of line 2c or 34. 
5.Divide the amount on line 4 by 730 days (or 24 months). Enter the result as a
decimal (rounded to at least 3 places). But do not enter an amount greater than
1.000

5.
 
6.Multiply the amount on line 1 by the decimal amount on line 56. 
7.Reduced maximum exclusion. Add the amounts in columns (a) and (b)
of line 6. Enter it here and on Worksheet 2, line 13

7.
 
*If you were a member of the uniformed services or Foreign Service, an employee of the intelligence community, or an employee or volunteer of the Peace Corps during the time you owned the home, see Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps to determine your 5-year period.