Uncle Sam has a generous tax exemption for millions of home sellers each year. Whether you own a house, condo, co-op, or some other type of principal residence you can qualify by following the guidelines.
You must have owned and lived in your home for 24 months of the last 60 months before selling. Single homeowners qualify for up to $250,000. A married couple (joint tax return) can qualify for up to $500,000 tax-free capital gains if both have satisfied the occupancy requirements – even if only one name is on the deed. It doesn’t matter what type of title is held (even a revocable living trust is OK). There are some deed exceptions – and rental properties and second homes have additional requirements – in addition there are some benefits for divorced couples and a surviving spouse.
There is no restriction on age, doesn’t matter if you buy a replacement home, and it is not necessary to occupy the home at the time of sale. There is a partial exemption if you have owned and lived in the house less than 24 months. This generous tax exemption can be used over and over again – but not more frequently than every 24 months for qualified homeowners. For full details about the requirements and who qualifies check with your tax expert.