What documentation/forms are necessary when a home is sold?

[Coleen3 · Accepted solution]

It depends on the character of the ownership. Each one has it's own entry point.

There are several possibilites:

• You qualify for the exclusion
• You do not qualify for an exclusion
• It was a second home
• It was at one point a rental property

• If you meet the qualifications to use the exclusion, any gain over that amount is a capital gain. The exclusions are $250,000 for single, and $500,000 for married filing jointly. See the rules below.

  Does Your Home Sale Qualify for Maximum Exclusion

   Your sale qualifies for exclusion of $250,000 gain ($500,000 if married filing jointly) if all of the following requirements are met.

  • You owned the home and used it as your main home during at least 2 of the last 5 years before the date of sale.
  • You didn’t acquire the home through a like-kind exchange (also known as a 1031 exchange), during the past 5 years.
  • You didn’t claim any exclusion for the sale of a home that occurred during a 2-year period ending on the date of the sale of the home, the gain from which you now want to exclude.