What are the requirements for a home sale exclusion?

Ownership test — You must own the home for at least two of the last five years, ending on the date of sale. Use test — You must live in/use the home as your main home for at least two of the last five years, ending on the date of sale. For sales of homes after Dec. 31, 2008, periods of nonqualified use might reduce your exclusion amount.

What do you need to know about Section 121 exclusion?

Qualifying for the Exclusion. In general, to qualify for the Section 121 exclusion, you must meet both the ownership test and the use test. You’re eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale.

Can a spouse be excluded from the sale of a home?

Both spouses meet the use test. Neither you nor your spouse excluded gain from the sale of another home in the two-year period ending on the date of the sale. Don’t report the sale of your main home on your return unless one of these applies: lan to report your gain as taxable even though some or all of it is eligible for exclusion.

When do you qualify for a partial exclusion?

However, taxpayers who do not meet a safe harbor can still qualify for a partial exclusion if they demonstrate that one of the three qualifying situations was the primary reason for the sale or exchange. The following may indicate that an event or circumstance was the primary reason for a premature home sale (Regs. Sec. 1.121-3 (b)):

Do you have to own a house to be excluded from SSI?

To be eligible for the home exclusion, you must own the home. To qualify for this exclusion, you can hold title to the house by yourself, share the title with others, or even have an equitable interest in the property (more on this below).

Can a home qualify for a partial exclusion of gain?

To qualify for a partial exclusion of gain, meaning an exclusion of gain less than the full amount, you must meet one of the situations listed in Does Your Home Qualify for a Partial Exclusion of Gain, later. Before considering the Eligibility Test or whether your home qualifies for a partial exclusion, you should consider some preliminary items.