The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice.
If you are a homeowner, you will probably sell your home at some point in your lifetime. This will happen in several circumstances – buying a larger home as your family grows, employer required move, voluntary move, retirement, downsizing, death, divorce, or separation, etc.  This is a reportable transaction insofar as the Internal Revenue Service is concerned. You should also be prepared to provide written documentation for both your tax return and if your return is questioned by the IRS.   One of the most important documents which you will need is the Housing and Urban Development disclosure form which is often referred to simply as a “HUD-1”. You will have received this document each time that you go through the closing process – when you originally purchased your home and when you sold it to someone else.  Â
A related article on this subject (“Are You Planning To Sell A Home?”) was published on this website on August 8th, 2011 (http://www.billseabrookecpa.com/blog/?p=1199).
The entity that was responsible for the closing for the sale of your previously owned residence (usually a title company, but in some states an attorney performs these tasks) will be providing the IRS with a Form 1099-S (“Proceeds From Real Estate Transactions”) which is an “information return” to provide the IRS with the dollar amount of the sale. You will also receive a copy of this form.    Be sure that you complete all of the required blocks in the Schedule D (“Capital Gains & Losses”) worksheet of your tax return for the year of the sale. If you have met all of the requirements, some or all of the gain will be excluded from your capital gains, as provided by Section 121 of the Internal Revenue Code. This information will appear in Section II (“Long Term Capital Gains and Losses – Assets Held More Than One year”) of Schedule D. Losses on the sale of a personal residence are not deductible.   Â
Ten Tax Tips for Individuals Selling Their Home
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 The Internal Revenue Service has some important information for those who have sold or are about to sell their home. If you have a gain from the sale of your main home, you may be able to exclude all or part of that gain from your income.
 Here are 10 tips from the IRS to keep in mind when selling your home.
 1.  In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.
 2.  If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).
 3.  You are not eligible for the full exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.
 4.  If you can exclude all of the gain, you do not need to report the sale of your home on your tax return.
 5.  If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.
 6.  You cannot deduct a loss from the sale of your main home.
 7.  Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.  Most tax software can also help with
this calculation.
 8.  If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.
 9.  Special rules may apply when you sell a home for which you received the first-time homebuyer credit.  See Publication 523, Selling Your Home, for details.
 10.  When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive mail from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.
 For more information about selling your home, see IRS Publication 523, Selling Your Home. This publication is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
 Links:
 Publication 523, Selling Your Home (PDF)
- Form 8822, Change of Address (PDF)
- Tax Topic 701 – Sale of Your Home
- Real Estate Tax Tips – Sale of Residence
 YouTube Videos:Â
- Selling Your Home – English | ASL
- First-Time Homebuyer Credit Account Look-Up Tool – English | Spanish | ASL
 Podcasts:Â