If you sold your main home during the 2026 tax year, you may be able to exclude some or all of the gain from your income. This can be a significant tax benefit, allowing many homeowners to avoid paying taxes on a large portion of their profit from the sale.
Maximum Home Sale Exclusion
You may qualify for the maximum exclusion if both of the following are true:
- You owned the home for at least two years during the five-year period ending on the date of sale, and
- You used the home as your main home for at least two years during that same five-year period.
The ownership and use periods do not have to be continuous. However, both requirements must be met.
In addition, you generally cannot claim the exclusion if you excluded gain from the sale of another home within the two-year period before the sale of your current home.
How Much Gain Can I Exclude?
If you qualify, the maximum exclusion is:
- $250,000 for taxpayers filing as Single, Head of Household, or Married Filing Separately
- $500,000 for taxpayers filing Married Filing Jointly, provided both spouses meet the applicable use requirements and at least one spouse meets the ownership requirement
If your gain is less than the maximum exclusion amount, the entire gain may be excluded from income.
What If I Don't Meet the Two-Year Requirement?
You may still qualify for a reduced maximum exclusion if you sold your home before meeting the full ownership and use tests because of:
- A change in your place of employment
- Health-related reasons
- Certain unforeseen circumstances
Common examples of unforeseen circumstances may include events such as natural disasters, divorce or legal separation, multiple births from the same pregnancy, or other qualifying situations recognized by the IRS.
The reduced exclusion is generally calculated based on the amount of time you met the ownership and use requirements before the sale.
Do I Need to Report the Sale?
Even if your entire gain is excluded, you may still need to report the sale on your tax return in certain situations, such as when you receive Form 1099-S, Proceeds From Real Estate Transactions. Your tax software will help determine whether reporting is required and calculate any taxable gain that exceeds the allowable exclusion.
What Is My Main Home?
Your main home is generally the home where you lived most of the time. It can include:
- A house
- A condominium
- A cooperative apartment
- A mobile home
- A houseboat
The key factor is that the property served as your primary residence.