If we purchased our home in 12/16/2019 and sold it in 07/24/2024. filing MFJ are we exempt from capital gain? do we still need to report the capital gain?

[IU_GarC]

If we purchased our home in 12/16/2019 and sold it in 07/24/2024. filing MFJ are we exempt from capital gain? do we still need to report the capital gain?

[xmasbaby0]

If your gain was more than  $250,000 filing Single, or more than $500,000 filing Married Filing Jointly the sale must be reported on your tax return.  Whether you re-invested the gain in to another house is irrelevant.  If you  have a Form 1099-S go to Federal>Wages and Income>Less Common Income>Sale of Home (gain or loss)

If you owned and lived in the home as your primary residence for at least 2 of the last 5 years on the date of the sale, you do not have to report the home sale if the gain is less than $250K filing Single, or less than $500K filing Married Filing Jointly (and you both owned and lived in the home for at least 2 years).

• If you are using online TT, you need Premium software to report the 1099-S

[DoninGA]

If you sold your primary personal residence and you lived in and owned the home for at least two years in the five year period on the date of sale, you do not have to report the sale if your gains are less then the exclusion amounts of $250,000 if filing Single or $500,000 if filing Married Filing Jointly (and both lived in the home for two years).

Gain or Loss = Sales Price minus Sales Expenses minus Adjusted Basis (Purchase Price plus the cost of improvements prior to the sale)

If you had a gain greater then the exclusion amounts then you would have to report the sale. Also, if you received a Form 1099-S for the sale either with a gain or a loss, the sale has to be reported. You will need the online TurboTax Premium edition to report the sale if you are using the online editions. Make sure that you indicate that you want the sale of the home reported on your tax return.

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Less Common Income
On Sale of Home (gain or loss), click the start or update button

Or enter sale of home in the Search box located in the upper right of the program screen. Click on Jump to sale of home

[IU_GarC]

Our capital gain was less than 500,000. and we lived in the home for 4 years and 10 months. Do we still have to report this gain in our federal taxes? we did receive form 1098.  I understand it says 2 out of the 5 years. But did I have to own the home for 5 years? 

[DoninGA]

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@IU_GarC wrote:

Our capital gain was less than 500,000. and we lived in the home for 4 years and 10 months. Do we still have to report this gain in our federal taxes? we did receive form 1098. 

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No you do not have to report the sale if you did Not receive a Form 1099-S from either the title company or from the closing attorney.

[MindyB]

It depends, did you reside in the home for at least 24 months of the time you owned it?  If so, then yes, you can exclude up to $500,000 of capital gain. The exclusion rule is that you must have resided in the home for 2 years (24 months) out of the last 5 years - you do not need to own it for a full 5 years.

Often, you do not need to report the sale on your tax return if you met the exclusion rules.  However, if you received a 1099-S, then you do (there will still not be any tax due, it will be informational only).

Here is some more information: Tax Aspects of Home Ownership: Selling a Home