In most cases, the gain on the sale of a principal residence is exempt from taxation.

 

To be defined as the taxpayer’s principal residence, the taxpayer must have owned the home and used it as his/her principal residence for at least two years during the 5-year period ending on the date of sale.

 

The amount of gain on a personal residence that can be excluded from taxable income is dependent on the taxpayer’s filing status.

 

Excludable amounts of gain are as follows:

 

• Single                $250,000

• Married Filing Jointly        $500,000

• Married Filing Separately    $250,000

• Head of Household        $250,000

• Qualifying Widow(er)        $500,000

(sale within 2 years from death of spouse)