Hello 8079, congratulations on the sale of your house.
Taxpayers are only taxed on the gain or profit from selling the house. The profit or gain is determined by subtracting the sales price from the purchase price. If the sales price is higher than the purchase price there is a gain on the sale. If the sales price is lower than the purchase price there is a loss on the sale.
You are unable to deduct a loss on the sale of your personal residence on your tax return; however, you are able to exclude some or all of the gain on the sale of your personal residence if you meet the criteria.
If you lived in the home for a total of two (2) of the last five (5) years before the sale, you are able to exclude up to $250,000 of the gain on the sale of the house if filing as Single and $500,000 if filing as Married Filing a Joint Return.
Tax Aspects of Home Ownership: Selling a Home
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