I owned my house for 3.5 years. If I read these two statements correctly from PA's website, then I do not have to report anything on the Schedule D since I am exempt. Is this interpretation correct?
If a taxpayer is eligible for Tax Forgiveness without reporting any gain from the sale of a principle residence, he is required to include the gain from the sale of the home on Line 8 in Part C of PA Schedule SP, Special Tax Forgiveness, in the determination of eligibility income. Otherwise, taxpayers qualifying for the full exclusion of the gain are not required to report or include any additional information or forms with PA-40 income tax returns.
I also see this in the Schedule D instructions, which is similar to initial reply but states the gain is exempt and I think that means I dont report it: PA law excludes the qualifying gain from the sale of a principal residence. Generally, if a home was owned and the property was used as a principal residence for at least two of the five years preceding the sale, the gain is exempt. However, a gain must be reported if the requirements for exempting the gain are not met.
