The Tax Cuts and
Jobs Act of 2017 makes many changes to the treatment of capital gains and
losses, but capital gains from the sale of your principal residence can still
be excluded.
To qualify, you must
have owned your home and used it as your main residence for at least two years
in the five-year period before you sell it. You also must not have excluded
another home from capital gains in the two-year period before the home sale. If
you meet those requirements, you can exclude up to $250,000 in gains from a
home sale if you’re single and up to $500,000 if you’re married filing jointly.
If you sell a home
that was not a primary residence or that does not meet the above requirements,
then you would pay capital gains on that sale.
Please note that the rule above actually is two separate requirements. During the five years before you sell the house, you must have:
- Owned the home for at least two years, and
- Lived in the home, as your principal residence, for at least two years.
The ownership test must be met by at least one spouse, if Married Filing Jointly. The residence test must be met by both spouses.
