The sale of a main home exclusion allows military members to exclude a significant portion of the gain from the sale of their primary residence from taxable income. Here are the key points:
General Exclusion Amounts:
Individual: Up to $250,000 of gain can be excluded.
Married Couples Filing Jointly: Up to $500,000 of gain can be excluded.
Ownership and Use Requirements:
Typically, you must have owned and lived in the home as your primary residence for at least 2 of the last 5 years before the sale.
Special Provisions for Military Members:
Military members can suspend the 5-year period for up to 10 years during which they are on qualified official extended duty12. This means they can still qualify for the exclusion even if they haven't lived in the home for 2 of the last 5 years due to military service.
Frequency of Use:
The exclusion can generally be used once every 2 years.
Program Entry:
- Federal Section
- Income
- Investments
- Sale of Main Home Worksheet
- Basic Information about Your Home
- Check here if you qualify for the Maximum Exclusion or the Reduced Maximum Exclusion.
These provisions help military members manage their finances more effectively when they need to relocate due to service requirements