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Who has to file?
http://www.irs.gov/uac/Do-I-Need-to-File-a-Tax-Return%3F
SALE OF HOUSE
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).
To summarize, if you received a Form 1099-S, you need to file a tax return and report the sale. If the house did not serve as your primary residence for 24 of the 60 months prior to the sale, you need to file a tax return. If the house was your primary residence for 24 of the 60 months prior to the sale, and your gain was less than $250,000 if filing single, or $500,000 filing joint, you don't have to file.
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