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Home Sale Exclusion Calculator$250,000 and $500,000 (IRC 121)

What do these figures come to once the work is shown?

Gain on a main home sale, the exclusion available, the reduced maximum for a short stay and the taxable gain including depreciation.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Taxable gain
$10,000
After the section 121 exclusion
Gain realized
$446,000
Maximum exclusion
$500,000
250,000 or 500,000 under section 121(b)
Drawn to one scale
Taxable gain$10,000
Gain realized$446,000
Maximum exclusion$500,000
Gain excluded$436,000
Gain from post-1997 depreciation (not excludable)$10,000
All results
MeasureResult
Taxable gain$10,000
Gain realized$446,000
Maximum exclusion
250,000 or 500,000 under section 121(b)
$500,000
Gain excluded$436,000
Gain from post-1997 depreciation (not excludable)
Taxed even when the rest is excluded
$10,000
How this was worked out
Work shownrecomputed as you type
Gain = sale price - selling expenses - adjusted basis
Maximum = $250,000 ($500,000 joint) x months of qualifying use (up to 24) / 24
Excluded = lesser of the maximum and (gain - depreciation after May 6, 1997)
Taxable = gain - excluded

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Gain = sale price - selling expenses - adjusted basis
  • Maximum = $250,000 ($500,000 joint) x months of qualifying use (up to 24) / 24
  • Excluded = lesser of the maximum and (gain - depreciation after May 6, 1997)
  • Taxable = gain - excluded

How it works

Section 121 excludes up to $250,000 of gain on the sale of a main home, or $500,000 on a joint return, if you owned and used the home as your main home for periods totaling 2 years in the 5 years before the sale. For a joint return, either spouse may meet the ownership test but both must meet the use test.

If you fail the 2-year tests for a reason section 121(c) recognizes, the maximum is cut by the fraction of 2 years you did qualify. The exclusion never covers gain up to the depreciation taken after May 6, 1997. This tool does not allocate gain to periods of nonqualified use under section 121(b)(5).

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

What if I fall short of 2 years?

Section 121(c) can reduce the maximum by the fraction of 2 years that you qualified, where its conditions are met. Enter the qualifying months.

What happens on a loss?

This tool shows zero taxable gain when the sale produces no gain.

What about nonqualified use after 2008?

Section 121(b)(5) can take part of the gain out of the exclusion. This tool does not compute that allocation.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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