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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3282
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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What happens when I make $50,000 off the sale of my house?

Customer Question

What happens when I make $50,000 off the sale of my house? With my taxes?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Hello,

If you have a gain of $50,000 from selling your own home (a house that you have owned and lived in for 2 of the last 5 years before you sell) you would not have to pay tax on the $50,000 because of teh Exclusion form Gain on Main Home Law.

If you have not owned and lived in the house that long you might still be able to exclude some of the gain if you had to move and sell because of a special reason.

Expert:  Robin D. replied 1 year ago.

Please let me know if you need clarification.

Expert:  Barbara replied 1 year ago.
Different expert here - My name is ***** ***** please allow me to provide you with some additional information you will find helpful.
If you have sold your main home (primary residence), you are not required to report the sale on your tax return UNLESS you receive a Form 1099-S from the title company/closing agent. (The title company/closing agent should have done its due diligence by asking you if the home was your primary residence prior to the closing.)
As mentioned above, there is a sale of home exclusion of up to $250,000 (if you file single) and $500,000 (if you file married filing jointly). The only requirements are that you owned and lived in the home for 2 of the last 5 years.
In other words, UNLESS you received a 1099-S, you do not report the sale and you do not pay any taxes on the $50,000.
Please let me know if you require further information.
Thank you and best regards,
Barb
Expert:  Robin D. replied 1 year ago.

Hello (original expert here)

I must disagree with some the information added in the above additional post.

Actually the IRS states:
Determine whether you need to report the gain from your home. You need to report the gain if ANY of the following is true.

You have taxable gain on your home sale (or on the residential portion of your property if you made separate calculations for home and business) and do not qualify to exclude.

  • You received Form 1099-S. If so, you must report the sale even if you have no taxable gain to report.

  • You wish to report your gain as taxable gain even though some or all of it is eligible for exclusion. You may wish to do this if, for example, you plan to sell another property that qualifies as a home within the next two years, and that property is likely to have a larger gain. If you choose to report, rather than exclude, your taxable gain, you can go back later and undo that choice by filing an amended return, but only within 3 calendar years after the year of sale.


  • Under the first bullet above you may not receive a 1099S but you know you do not meet the requirements so you would still need to report the sale. It would be incorrect to leave you with the possible impression that, just because no one else reports income to the IRS a taxpayer may have been paid, there is therefore no requirement on the taxpayer to report it either.
    Expert:  Barbara replied 1 year ago.
    2nd expert here - my post to this thread was to alert you to the fact that there may be a reporting requirement on your tax return even though you have no tax liability.
    The sentence in my original answer should have read "In other words, UNLESS you received a 1099-S for the sale of your primary residence, you do not report the sale and you do not pay any taxes on the $50,000."
    I apologize for any confusion or inconvenience caused by the multiple posts.
    Best regards,
    Barb