Sale of residence

The IRS provided tips for taxpayers who have sold or are about to sell their principal residence. In general, sellers can exclude up to $250,000 of the gain ($500,000 on a joint return) from income if they owned and used the home as their principal residence for two of the five years prior to the date of its sale. If all of the gain is excludable, the sale need not be reported; if part of the gain cannot be excluded, it must be reported on Form 1040 (Capital Gains and Losses). If the seller claimed the first-time homebuyer credit and the property is no longer used as the principal residence within 36 months of the date of purchase, the credit must be repaid. Finally, sellers should notify the IRS of their new address by filing Form 8822 (Change of Address). Summertime Tax Tip 2011-15.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.