You won't pay taxes on the first $250,000 (also known as a gain) you make from the sale of your home. If you're Married Filing Jointly, you won't pay taxes on the first $500,000.
That income is free and clear as long as:
- You owned the home.
- It was your main home for two years or more within the five years leading up to the sale.
- You waited at least two years between selling your primary home and excluding your first $250,000 or $500,000 from taxes. In other words, you may buy and sell as many primary homes as you'd like, but you'll only get this tax benefit every two years.
When you sell a second home, the tax situation is different.
TurboTax will show you if your home sale is taxable.
- Open or continue your return in TurboTax.
- Search for home sale.
- Select the Jump to link in the search results.
- Answer Yes to Did you sell or have your home foreclosed in 2020? on the Sale of Your Main Home screen.
- Follow the instructions to enter your info.