Home Sale Tax
Imagine selling your home and then having to pay a whopping tax on the gain as income?
OK, now that you are in shock let's look at the whole thing again.
You may be able to avoid all or part of that.
If you have spent at least two years all told living in the house out of the last 5 years before it's sale, you would be able to get an exclusion as long as you have not excluded a gain from another home in the past two years before the sale of this home.
There are some exceptions
See IRS Publication 523.
If you can't get an exclusion from your income for the amount, then you have to report it on a Form 1040D - Capital Gains and Losses.
If you sell the property as an installment sale then all or some of the payments will come to you in later years, and you have a different situation. You can report it as an installment sale or elect out.
If you decide to elect out the procedure, then you should report all the gain as income in the year of the sale of the house. Losses don't apply here. You may or may not want to do this as you have to decide which method is most beneficial.
In the Army now!In certain circumstances If you or a spouse are in the military, spies (intelligence service) or foreign service you get to suspend the five year requirement and take up to ten years.
That is considerate.
There are specific details about this deal.
You have to be on a qualified official duty for more than 90 days or longer.
You can't be living at your house and must be at a duty station housed at least 50 miles from home etc. or under orders and living in some government housing.
Semper Fi - Carry on
See IRS topic 701