Can I Exclude the Gain From the Sale of My Main Home?
Yes. If you sell your main home during the tax year, you may be able to exclude some or all of the gain from your income.
For 2026 tax returns (filed in 2027), the maximum exclusion is:
- Up to $250,000 if you're filing as Single, Head of Household, or Married Filing Separately
- Up to $500,000 if you're Married Filing Jointly and meet the requirements
The home sale exclusion can be claimed more than once during your lifetime. However, you generally cannot claim it if you excluded gain from the sale of another home during the 2-year period before the sale date of the home you're reporting.
Who Qualifies for the Home Sale Exclusion?
To exclude gain from the sale of your main home, you generally must meet both the ownership test and the use test.
Ownership Test
You must have owned the home for at least 2 years during the 5-year period ending on the date of sale.
For married taxpayers filing jointly, only one spouse must meet the ownership test.
Use Test
You must have lived in the home as your main residence for at least 2 years during the 5-year period ending on the date of sale.
For married taxpayers filing jointly, each spouse must meet the use test to qualify for the full $500,000 exclusion.
Important Note
The 2 years of ownership and the 2 years of use:
- Do not have to be continuous
- Do not have to occur at the same time
- Only need to fall within the 5-year period before the sale
For example, you may qualify even if you temporarily moved away and later returned to the home.
How Do I Report the Sale of My Main Home?
To report the sale of your main home and any allowable exclusion in the software, navigate to:
- Federal
- Income (Select My Forms)
- Investments
- Sale of Main Home Worksheet
The worksheet will help determine the taxable gain, if any, and calculate the exclusion you're eligible to claim.
What If I Don't Meet the Ownership or Use Tests?
You may still qualify for a reduced exclusion if you sold your home because of certain qualifying events.
Common examples include:
- A change in your place of employment
- Certain health-related reasons
- Divorce or legal separation
- Natural disasters or other casualty events affecting the home
- An involuntary conversion of the home
- Other unforeseen circumstances recognized by the IRS
If you qualify, the IRS may allow a partial exclusion based on the amount of time you owned and lived in the home.
Can I Claim a Loss on the Sale of My Main Home?
No. The IRS does not allow a deduction for a loss on the sale of a personal residence.
Even if you sold your main home for less than you paid for it, the loss is considered a personal loss and is not deductible on your federal income tax return.
Need More Information?
For detailed rules, examples, and special situations, see IRS Publication 523, Selling Your Home. The publication covers topics such as:
- Home sale gain exclusions
- Partial exclusions
- Ownership and use requirements
- Military and foreign service exceptions
- Reporting requirements when you receive Form 1099-S
The IRS does not allow you to claim a loss on the sale of the Main Home. For more details and information, see IRS Publication 523.