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How Can I File My 2010 Taxes

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How Can I File My 2010 Taxes

How can i file my 2010 taxes Publication 557 - Additional Material Table of Contents Appendix. How can i file my 2010 taxes Sample Articles of Organization, continued Organization Reference Chart Section of 1986 Code Description of organization General nature of activities Application  Form Annual return required to be  filed Contributions  allowable 501(c)(1) Corporations Organized under Act of Congress (including Federal Credit Unions) Instrumentalities of the  United States No Form None Yes, if made for exclusively public purposes 501(c)(2) Title Holding Corporation For Exempt Organization Holding title to property of an  exempt organization 1024 9901 or 990-EZ8 No2 501(c)(3) Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations Activities of nature implied by description of class of organization 1023 9901 or 990-EZ8, or 990-PF Yes, generally 501(c)(4) Civic Leagues, Social Welfare Organizations, and Local Associations of Employees Promotion of community welfare; charitable, educational, or recreational 1024 9901 or 990-EZ8 No, generally 2, 3 501(c)(5) Labor, Agricultural, and Horticultural Organizations Educational or instructive, the  purpose being to improve conditions of work, and to improve products of efficiency 1024 9901 or 990-EZ8 No2 501(c)(6) Business Leagues, Chambers of Commerce, Real Estate Boards, etc. How can i file my 2010 taxes Improvement of business  conditions of one or more lines of business 1024 9901 or 990-EZ8 No2 501(c)(7) Social and Recreational Clubs Pleasure, recreation, social activities 1024 9901 or 990-EZ8 No2 501(c)(8) Fraternal Beneficiary Societies  and Associations Lodge providing for payment of life, sickness, accident or other benefits  to members 1024 9901 or 990-EZ8 Yes, if for certain Sec. How can i file my 2010 taxes 501(c)(3) purposes 501(c)(9) Voluntary Employees Beneficiary Associations Providing for payment of life, sickness, accident, or other benefits to members 1024 9901 or 990-EZ8 No2 501(c)(10) Domestic Fraternal Societies  and Associations Lodge devoting its net earnings to charitable, fraternal, and other  specified purposes. How can i file my 2010 taxes No life, sickness, or accident benefits to members 1024 9901 or 990-EZ8 Yes, if for certain Sec. How can i file my 2010 taxes 501(c)(3) purposes 501(c)(11) Teachers' Retirement Fund Associations Teachers' association for payment of retirement benefits Letter6 9901 or 990-EZ8 No2 501(c)(12) Benevolent Life Insurance Associations, Mutual Ditch or  Irrigation Companies, Mutual or Cooperative Telephone Companies, etc. How can i file my 2010 taxes Activities of a mutually beneficial  nature similar to those implied by the description of class of organization 1024 9901 or 990-EZ8 No2 501(c)(13) Cemetery Companies Burials and incidental activities 1024 9901 or 990-EZ8 Yes, generally 501(c)(14) State-Chartered Credit Unions,  Mutual Reserve Funds Loans to members Letter6 9901 or 990-EZ8 No2 501(c)(15) Mutual Insurance Companies or Associations Providing insurance to members substantially at cost 1024 9901 or 990-EZ8 No2 501(c)(16) Cooperative Organizations to  Finance Crop Operations Financing crop operations in  conjunction with activities of a marketing  or purchasing association Form 1120-C6 9901 or 990-EZ8 No2 501(c)(17) Supplemental Unemployment  Benefit Trusts Provides for payment of  supplemental unemployment compensation benefits 1024 9901 or 990-EZ8 No2 501(c)(18) Employee Funded Pension Trust (created before June 25, 1959) Payment of benefits under a  pension plan funded by employees Letter6 9901 or 990-EZ8 No2 501(c)(19) Post or Organization of Past or  Present Members of the Armed Forces Activities implied by nature of organization 1024 9901 or 990-EZ8 No, generally7 501(c)(21) Black Lung Benefit Trusts Funded by coal mine operators to satisfy their liability for disability or  death due to black lung diseases Letter6 990-BL No4 501(c)(22) Withdrawal Liability Payment Fund To provide funds to meet the  liability of employers withdrawing from  a multi-employer pension fund Letter6 9901 or 990-EZ8 No5 501(c)(23) Veterans' Organization (created before 1880) To provide insurance and other  benefits to veterans Letter6 9901 or 990-EZ8 No, generally7 501(c)(25) Title Holding Corporations or Trusts with Multiple Parent Corporations Holding title and paying over  income from property to 35 or fewer parents or beneficiaries 1024 9901 or 990-EZ8 No 501(c)(26) State-Sponsored Organization Providing Health Coverage for High-Risk Individuals Provides health care coverage to high-risk individuals Letter6 9901 or 990-EZ8 No 501(c)(27) State-Sponsored Workers' Compensation Reinsurance Organization Reimburses members for losses  under workers' compensation acts Letter6 9901 or 990-EZ8 No 501(c)(28) National Railroad Retirement Investment Trust Manages and invests the assets of the Railroad Retirement Account No Form 99011 No11 501(c)(29) CO-OP health insurance issuers A qualified health insurance issuer which has received a loan or grant under the CO-OP program Letter and Form 871814 9901 No13 501(d) Religious and Apostolic Associations Regular business activities;  Communal religious community No Form 10659 No2 501(e) Cooperative Hospital Service Organizations Performs cooperative services for hospitals 1023 9901 or 990-EZ8 Yes 501(f) Cooperative Service Organizations  of Operating Educational Organizations Performs collective investment  services for educational organizations 1023 9901 or 990-EZ8 Yes 501(k) Child Care Organizations Provides care for children 1023 9901 or 990-EZ8 Yes 501(n) Charitable Risk Pools Pools certain insurance risks of sec. How can i file my 2010 taxes 501(c)(3) organizations 1023 9901 or 990-EZ8 Yes 501(q) Credit Counseling Organization Credit counseling services 1023 102312 No 521(a) Farmers' Cooperative Associations Cooperative marketing and  purchasing for agricultural procedures 1028 1120-C No 527 Political organizations A party, committee, fund,  association, etc. How can i file my 2010 taxes , that directly or indirectly accepts contributions or makes expenditures for political campaigns 8871 1120-POL10 9901 or 990-EZ8 No 1For exceptions to the filing requirement, see chapter 2 and the form instructions. How can i file my 2010 taxes Note: For annual tax periods beginning after 2006, most tax-exempt organizations, other than churches, are required to file an annual Form 990, 990-EZ, or 990-PF with the IRS or to submit an annual electronic notice, Form 990-N (e-Postcard), to the IRS. How can i file my 2010 taxes Tax-exempt organizations failing to file an annual return or submit an annual notice as required for 3 consecutive years will automatically lose their tax-exempt status. How can i file my 2010 taxes    2An organization exempt under a subsection of section 501 other than 501(c)(3) can establish a charitable fund, contributions to which are deductible. How can i file my 2010 taxes Such a fund must itself meet the requirements of section 501(c)(3) and the related notice requirements of section 508(a). How can i file my 2010 taxes    3Contributions to volunteer fire companies and similar organizations are deductible, but only if made for exclusively public purposes. How can i file my 2010 taxes    4Deductible as a business expense to the extent allowed by section 192. How can i file my 2010 taxes    5Deductible as a business expense to the extent allowed by section 194A. How can i file my 2010 taxes 6Application is by letter to the address shown on Form 8718. How can i file my 2010 taxes A copy of the organizing document should be attached and the letter should be signed by an officer. How can i file my 2010 taxes    7Contributions to these organizations are deductible only if 90% or more of the organization's members are war veterans. How can i file my 2010 taxes    8For limits on the use of Form 990-EZ, see chapter 2 and the general instructions for Form 990-EZ (or Form 990). How can i file my 2010 taxes    9Although the organization files a partnership return, all distributions are deemed dividends. How can i file my 2010 taxes The members are not entitled to pass through treatment of the organization's income or expenses. How can i file my 2010 taxes    10Form 1120-POL is required only if the organization has taxable income as defined in section 527(c). How can i file my 2010 taxes    11Only required to annually file so much of the Form 990 that relates to the names and addresses of the officers, directors, trustees, and key employees, and their titles, compensation, and hours devoted to their positions (Part VII of Form 990), and to complete Item I in the Heading of Form 990 to confirm its tax-exempt status under section 501(c)(28). How can i file my 2010 taxes    12See section 501(q) if the organization provides credit counseling services and seeks recognition of exemption under section 501(c)(4). How can i file my 2010 taxes Use Form 1024 if applying for recognition under section 501(c)(4). How can i file my 2010 taxes    13See section 501(c)(29) for details. How can i file my 2010 taxes    14See Revenue Procedure 2012-11, sec. How can i file my 2010 taxes 4. How can i file my 2010 taxes 01, 2012-7 I. How can i file my 2010 taxes R. How can i file my 2010 taxes B. How can i file my 2010 taxes 368, for details. How can i file my 2010 taxes Appendix. How can i file my 2010 taxes Sample Articles of Organization The following are examples of Articles of Incorporation (Draft A) and a declaration of trust (Draft B) that contain the required information as to purposes and powers of an organization and disposition of its assets upon dissolution. How can i file my 2010 taxes You should bear in mind that requirements for these instruments may vary under applicable state law. How can i file my 2010 taxes See Private Foundations and Public Charities , earlier for the special provisions required in a private foundation's governing instrument in order for it to qualify for exemption. How can i file my 2010 taxes DRAFT A  Articles of Incorporation of the undersigned, a majority of whom are citizens of the United States, desiring to form a Non-Profit Corporation under the Non-Profit Corporation Law of , do hereby certify: First: The name of the Corporation shall be . How can i file my 2010 taxes Second: The place in this state where the principal office of the Corporation is to be located is the City of , County. How can i file my 2010 taxes Third: Said corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. How can i file my 2010 taxes Fourth: The names and addresses of the persons who are the initial trustees of the corporation are as follows: Name , Address Fifth: No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to its members, trustees, officers, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article Third hereof. How can i file my 2010 taxes No substantial part of the activities of the corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of or in opposition to any candidate for public office. How can i file my 2010 taxes Notwithstanding any other provision of these articles, the corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or (b) by a corporation, contributions to which are deductible under section 170(c)(2) of the Internal Revenue Code, or the corresponding section of any future federal tax code. How can i file my 2010 taxes   If reference to federal law in articles of incorporation imposes a limitation that is invalid in your state, you may wish to substitute the following for the last sentence of the preceding paragraph: “Notwithstanding any other provision of these articles, this corporation shall not, except to an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the purposes of this corporation. How can i file my 2010 taxes ” Sixth: Upon the dissolution of the corporation, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. How can i file my 2010 taxes Any such assets not so disposed of shall be disposed of by a Court of Competent Jurisdiction of the county in which the principal office of the corporation is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes. How can i file my 2010 taxes   In witness whereof, we have hereunto subscribed our names this day of , 20. How can i file my 2010 taxes Appendix. How can i file my 2010 taxes Sample Articles of Organization, continued Draft B The Charitable Trust. How can i file my 2010 taxes Declaration of Trust made as of the day of , 20 , by , of , and , of , who hereby declare and agree that they have received this day from , as Donor, the sum of Ten Dollars ($10) and that they will hold and manage the same, and any additions to it, in trust, as follows: First: This trust shall be called “The Charitable Trust. How can i file my 2010 taxes ” Second: The trustees may receive and accept property, whether real, personal, or mixed, by way of gift, bequest, or devise, from any person, firm, trust, or corporation, to be held, administered, and disposed of in accordance with and pursuant to the provisions of this Declaration of Trust; but no gift, bequest, or devise of any such property shall be received and accepted if it is conditioned or limited in such manner as to require the disposition of the income or its principal to any person or organization other than a “charitable organization” or for other than “charitable purposes” within the meaning of such terms as defined in Article Third of this Declaration of Trust, or as shall, in the opinion of the trustees, jeopardize the federal income tax exemption of this trust pursuant to section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. How can i file my 2010 taxes Third: a) The principal and income of all property received and accepted by the trustees to be administered under this Declaration of Trust shall be held in trust by them, and the trustees may make payments or distributions from income or principal, or both, to or for the use of such charitable organizations, within the meaning of that term as defined in paragraph C, in such amounts and for such charitable purposes of the trust as the trustees shall from time to time select and determine; and the trustees may make payments or distributions from income or principal, or both, directly for such charitable purposes, within the meaning of that term as defined in paragraph D, in such amounts as the trustees shall from time to time select and determine without making use of any other charitable organization. How can i file my 2010 taxes The trustees may also make payments or distributions of all or any part of the income or principal to states, territories, or possessions of the United States, any political subdivision of any of the foregoing, or to the United States or the District of Columbia but only for charitable purposes within the meaning of that term as defined in paragraph D. How can i file my 2010 taxes Income or principal derived from contributions by corporations shall be distributed by the trustees for use solely within the United States or its possessions. How can i file my 2010 taxes No part of the net earnings of this trust shall inure or be payable to or for the benefit of any private shareholder or individual, and no substantial part of the activities of this trust shall be the carrying on of propaganda, or otherwise attempting to influence legislation. How can i file my 2010 taxes No part of the activities of this trust shall be the participation in, or intervention in (including the publishing or distributing of statements), any political campaign on behalf of or in opposition to any candidate for public office. How can i file my 2010 taxes b) The trust shall continue forever unless the trustees terminate it and distribute all of the principal and income, which action may be taken by the trustees in their discretion at any time. How can i file my 2010 taxes On such termination, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. How can i file my 2010 taxes The donor authorizes and empowers the trustees to form and organize a nonprofit corporation limited to the uses and purposes provided for in this Declaration of Trust, such corporation to be organized under the laws of any state or under the laws of the United States as may be determined by the trustees; such corporation when organized to have power to administer and control the affairs and property and to carry out the uses, objects, and purposes of this trust. How can i file my 2010 taxes Upon the creation and organization of such corporation, the trustees are authorized and empowered to convey, transfer, and deliver to such corporation all the property and assets to which this trust may be or become entitled. How can i file my 2010 taxes The charter, bylaws, and other provisions for the organization and management of such corporation and its affairs and property shall be such as the trustees shall determine, consistent with the provisions of this paragraph. How can i file my 2010 taxes c) In this Declaration of Trust and in any amendments to it, references to “charitable organizations” or “charitable organization” mean corporations, trusts, funds, foundations, or community chests created or organized in the United States or in any of its possessions, whether under the laws of the United States, any state or territory, the District of Columbia, or any possession of the United States, organized and operated exclusively for charitable purposes, no part of the net earnings of which inures or is payable to or for the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation, and which do not participate in or intervene in (including the publishing or distributing of statements) any political campaign on behalf of or in opposition to any candidate for public office. How can i file my 2010 taxes It is intended that the organization described in this paragraph C shall be entitled to exemption from federal income tax under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. How can i file my 2010 taxes d) In this Declaration of Trust and in any amendments to it, the term “charitable purposes” shall be limited to and shall include only religious, charitable, scientific, literary, or educational purposes within the meaning of those terms as used in section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, but only such purposes as also constitute public charitable purposes under the law of trusts of the State of. How can i file my 2010 taxes Fourth: This Declaration of Trust may be amended at any time or times by written instrument or instruments signed and sealed by the trustees, and acknowledged by any of the trustees, provided that no amendment shall authorize the trustees to conduct the affairs of this trust in any manner or for any purpose contrary to the provisions of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. How can i file my 2010 taxes An amendment of the provisions of this Article Fourth (or any amendment to it) shall be valid only if and to the extent that such amendment further restricts the trustees' amending power. How can i file my 2010 taxes All instruments amending this Declaration of Trust shall be noted upon or kept attached to the executed original of this Declaration of Trust held by the trustees. How can i file my 2010 taxes Fifth: Any trustee under this Declaration of Trust may, by written instrument, signed and acknowledged, resign his office. How can i file my 2010 taxes The number of trustees shall be at all times not less than two, and whenever for any reason the number is reduced to one, there shall be, and at any other time there may be, appointed one or more additional trustees. How can i file my 2010 taxes Appointments shall be made by the trustee or trustees for the time in office by written instruments signed and acknowledged. How can i file my 2010 taxes Any succeeding or additional trustee shall, upon his or her acceptance of the office by written instrument signed and acknowledged, have the same powers, rights, and duties, and the same title to the trust estate jointly with the surviving or remaining trustee or trustees as if originally appointed. How can i file my 2010 taxes  None of the trustees shall be required to furnish any bond or surety. How can i file my 2010 taxes None of them shall be responsible or liable for the acts or omissions of any other of the trustees or of any predecessor or of a custodian, agent, depositary, or counsel selected with reasonable care. How can i file my 2010 taxes  The one or more trustees, whether original or successor, for the time being in office, shall have full authority to act even though one or more vacancies may exist. How can i file my 2010 taxes A trustee may, by appropriate written instrument, delegate all or any part of his or her powers to another or others of the trustees for such periods and subject to such conditions as such delegating trustee may determine. How can i file my 2010 taxes  The trustees serving under this Declaration of Trust are authorized to pay to themselves amounts for reasonable expenses incurred and reasonable compensation for services rendered in the administration of this trust, but in no event shall any trustee who has made a contribution to this trust ever receive any compensation thereafter. How can i file my 2010 taxes Sixth: In extension and not in limitation of the common law and statutory powers of trustees and other powers granted in this Declaration of Trust, the trustees shall have the following discretionary powers. How can i file my 2010 taxes a) To invest and reinvest the principal and income of the trust in such property, real, personal, or mixed, and in such manner as they shall deem proper, and from time to time to change investments as they shall deem advisable; to invest in or retain any stocks, shares, bonds, notes, obligations, or personal or real property (including without limitation any interests in or obligations of any corporation, association, business trust, investment trust, common trust fund, or investment company) although some or all of the property so acquired or retained is of a kind or size which but for this express authority would not be considered proper and although all of the trust funds are invested in the securities of one company. How can i file my 2010 taxes No principal or income, however, shall be loaned, directly or indirectly, to any trustee or to anyone else, corporate or otherwise, who has at any time made a contribution to this trust, nor to anyone except on the basis of an adequate interest charge and with adequate security. How can i file my 2010 taxes b) To sell, lease, or exchange any personal, mixed, or real property, at public auction or by private contract, for such consideration and on such terms as to credit or otherwise, and to make such contracts and enter into such undertakings relating to the trust property, as they consider advisable, whether or not such leases or contracts may extend beyond the duration of the trust. How can i file my 2010 taxes c) To borrow money for such periods, at such rates of interest, and upon such terms as the trustees consider advisable, and as security for such loans to mortgage or pledge any real or personal property with or without power of sale; to acquire or hold any real or personal property, subject to any mortgage or pledge on or of property acquired or held by this trust. How can i file my 2010 taxes d) To execute and deliver deeds, assignments, transfers, mortgages, pledges, leases, covenants, contracts, promissory notes, releases, and other instruments, sealed or unsealed, incident to any transaction in which they engage. How can i file my 2010 taxes e) To vote, to give proxies, to participate in the reorganization, merger, or consolidation of any concern, or in the sale, lease, disposition, or distribution of its assets; to join with other security holders in acting through a committee, depositary, voting trustees, or otherwise, and in this connection to delegate authority to such committee, depositary, or trustees and to deposit securities with them or transfer securities to them; to pay assessments levied on securities or to exercise subscription rights in respect of securities. How can i file my 2010 taxes f) To employ a bank or trust company as custodian of any funds or securities and to delegate to it such powers as they deem appropriate; to hold trust property without indication of fiduciary capacity but only in the name of a registered nominee, provided the trust property is at all times identified as such on the books of the trust; to keep any or all of the trust property or funds in any place or places in the United States of America; to employ clerks, accountants, investment counsel, investment agents, and any special services, and to pay the reasonable compensation and expenses of all such services in addition to the compensation of the trustees. How can i file my 2010 taxes Seventh: The trustees' powers are exercisable solely in the fiduciary capacity consistent with and in furtherance of the charitable purposes of this trust as specified in Article Third and not otherwise. How can i file my 2010 taxes Eighth: In this Declaration of Trust and in any amendment to it, references to “trustees” mean the one or more trustees, whether original or successor, for the time being in office. How can i file my 2010 taxes Ninth: Any person may rely on a copy, certified by a notary public, of the executed original of this Declaration of Trust held by the trustees, and of any of the notations on it and writings attached to it, as fully as he might rely on the original documents themselves. How can i file my 2010 taxes Any such person may rely fully on any statements of fact certified by anyone who appears from such original documents or from such certified copy to be a trustee under this Declaration of Trust. How can i file my 2010 taxes No one dealing with the trustees need inquire concerning the validity of anything the trustees purport to do. How can i file my 2010 taxes No one dealing with the trustees need see to the application of anything paid or transferred to or upon the order of the trustees of the trust. How can i file my 2010 taxes Tenth: This Declaration of Trust is to be governed in all respects by the laws of the State of . How can i file my 2010 taxes Trustee Trustee Prev  Up  Next   Home   More Online Publications
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The Office of Fair Housing and Equal Opportunity enforces federal laws and establishes policies to ensure that all Americans have equal access to the housing of their choice.

The How Can I File My 2010 Taxes

How can i file my 2010 taxes Publication 523 - Main Content Table of Contents Main HomeVacant land. How can i file my 2010 taxes Factors used to determine main home. How can i file my 2010 taxes Figuring Gain or LossSelling Price Amount Realized Adjusted Basis Amount of Gain or Loss Dispositions Other Than Sales Determining BasisCost As Basis Basis Other Than Cost Adjusted Basis Excluding the GainMaximum Exclusion Ownership and Use Tests Reduced Maximum Exclusion Nonqualified Use Business Use or Rental of HomeUnrecaptured section 1250 gain. How can i file my 2010 taxes Property Used Partly for Business or Rental Reporting the SaleSeller-financed mortgage. How can i file my 2010 taxes Individual taxpayer identification number (ITIN). How can i file my 2010 taxes More information. How can i file my 2010 taxes Comprehensive Examples Special SituationsException for sales to related persons. How can i file my 2010 taxes Deducting Taxes in the Year of SaleForm 1099-S. How can i file my 2010 taxes More information. How can i file my 2010 taxes Recapturing (Paying Back) a Federal Mortgage Subsidy Recapture of First-Time Homebuyer CreditExample. How can i file my 2010 taxes Worksheets How To Get Tax HelpLow Income Taxpayer Clinics Main Home This section explains the term “main home. How can i file my 2010 taxes ” Usually, the home you live in most of the time is your main home and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. How can i file my 2010 taxes To exclude gain under the rules in this publication, you in most cases must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale. How can i file my 2010 taxes Land. How can i file my 2010 taxes   If you sell the land on which your main home is located, but not the house itself, you cannot exclude any gain you have from the sale of the land. How can i file my 2010 taxes Example. How can i file my 2010 taxes You buy a piece of land and move your main home to it. How can i file my 2010 taxes Then, you sell the land on which your main home was located. How can i file my 2010 taxes This sale is not considered a sale of your main home, and you cannot exclude any gain on the sale of the land. How can i file my 2010 taxes Vacant land. How can i file my 2010 taxes   The sale of vacant land is not a sale of your main home unless: The vacant land is adjacent to land containing your home, You owned and used the vacant land as part of your main home, The separate sale of your home satisfies the requirements for exclusion and occurs within 2 years before or 2 years after the date of the sale of the vacant land, and The other requirements for excluding gain from the sale of a main home have been satisfied with respect to the vacant land. How can i file my 2010 taxes If these requirements are met, the sale of the home and the sale of the vacant land are treated as one sale and only one maximum exclusion can be applied to any gain. How can i file my 2010 taxes See Excluding the Gain , later. How can i file my 2010 taxes The destruction of your home is treated as a sale of your home. How can i file my 2010 taxes As a result, you may be able to meet these requirements if you sell vacant land used as a part of your main home within 2 years from the date of the destruction of your main home. How can i file my 2010 taxes For information, see Publication 547. How can i file my 2010 taxes More than one home. How can i file my 2010 taxes   If you have more than one home, you can exclude gain only from the sale of your main home. How can i file my 2010 taxes You must include in income the gain from the sale of any other home. How can i file my 2010 taxes If you have two homes and live in each of them, your main home is ordinarily the one you live in most of the time during the year. How can i file my 2010 taxes Example 1. How can i file my 2010 taxes You own two homes, one in New York and one in Florida. How can i file my 2010 taxes From 2009 through 2013, you live in the New York home for 7 months and in the Florida residence for 5 months of each year. How can i file my 2010 taxes In the absence of facts and circumstances indicating otherwise, the New York home is your main home. How can i file my 2010 taxes You would be eligible to exclude the gain from the sale of the New York home but not of the Florida home in 2013. How can i file my 2010 taxes Example 2. How can i file my 2010 taxes You own a house, but you live in another house that you rent. How can i file my 2010 taxes The rented house is your main home. How can i file my 2010 taxes Example 3. How can i file my 2010 taxes You own two homes, one in Virginia and one in New Hampshire. How can i file my 2010 taxes In 2009 and 2010, you lived in the Virginia home. How can i file my 2010 taxes In 2011 and 2012, you lived in the New Hampshire home. How can i file my 2010 taxes In 2013, you lived again in the Virginia home. How can i file my 2010 taxes Your main home in 2009, 2010, and 2013 is the Virginia home. How can i file my 2010 taxes Your main home in 2011 and 2012 is the New Hampshire home. How can i file my 2010 taxes You would be eligible to exclude gain from the sale of either home (but not both) in 2013. How can i file my 2010 taxes Factors used to determine main home. How can i file my 2010 taxes   In addition to the amount of time you live in each home, other factors are relevant in determining which home is your main home. How can i file my 2010 taxes Those factors include the following. How can i file my 2010 taxes Your place of employment. How can i file my 2010 taxes The location of your family members' main home. How can i file my 2010 taxes Your mailing address for bills and correspondence. How can i file my 2010 taxes The address listed on your: Federal and state tax returns, Driver's license, Car registration, and Voter registration card. How can i file my 2010 taxes The location of the banks you use. How can i file my 2010 taxes The location of recreational clubs and religious organizations of which you are a member. How can i file my 2010 taxes Property used partly as your main home. How can i file my 2010 taxes   If you use only part of the property as your main home, the rules discussed in this publication apply only to the gain or loss on the sale of that part of the property. How can i file my 2010 taxes For details, see Business Use or Rental of Home , later. How can i file my 2010 taxes Figuring Gain or Loss To figure the gain or loss on the sale of your main home, you must know the selling price, the amount realized, and the adjusted basis. How can i file my 2010 taxes Subtract the adjusted basis from the amount realized to get your gain or loss. How can i file my 2010 taxes     Selling price     − Selling expenses       Amount realized     − Adjusted basis       Gain or loss   Gain. How can i file my 2010 taxes   Gain is the excess of the amount realized over the adjusted basis of the property. How can i file my 2010 taxes Loss. How can i file my 2010 taxes   Loss is the excess of the adjusted basis over the amount realized for the property. How can i file my 2010 taxes Selling Price The selling price is the total amount you receive for your home. How can i file my 2010 taxes It includes money and the fair market value of any other property or any other services you receive and all notes, mortgages or other debts assumed by the buyer as part of the sale. How can i file my 2010 taxes Personal property. How can i file my 2010 taxes   The selling price of your home does not include amounts you received for personal property sold with your home. How can i file my 2010 taxes Personal property is property that is not a permanent part of the home. How can i file my 2010 taxes Examples are furniture, draperies, rugs, a washer and dryer, and lawn equipment. How can i file my 2010 taxes Separately stated amounts you received for these items should not be shown on Form 1099-S (discussed later). How can i file my 2010 taxes Any gains from sales of personal property must be included in your income, but not as part of the sale of your home. How can i file my 2010 taxes Payment by employer. How can i file my 2010 taxes   You may have to sell your home because of a job transfer. How can i file my 2010 taxes If your employer pays you for a loss on the sale or for your selling expenses, do not include the payment as part of the selling price. How can i file my 2010 taxes Your employer will include it as wages in box 1 of your Form W-2 and you will include it in your income on Form 1040, line 7, or on Form 1040NR, line 8. How can i file my 2010 taxes Option to buy. How can i file my 2010 taxes   If you grant an option to buy your home and the option is exercised, add the amount you receive for the option to the selling price of your home. How can i file my 2010 taxes If the option is not exercised, you must report the amount as ordinary income in the year the option expires. How can i file my 2010 taxes Report this amount on Form 1040, line 21, or on Form 1040NR, line 21. How can i file my 2010 taxes Form 1099-S. How can i file my 2010 taxes   If you received Form 1099-S, box 2 (gross proceeds) should show the total amount you received for your home. How can i file my 2010 taxes   However, box 2 will not include the fair market value of any services or property other than cash or notes you received or will receive. How can i file my 2010 taxes Instead, box 4 will be checked to indicate your receipt or expected receipt of these items. How can i file my 2010 taxes Amount Realized The amount realized is the selling price minus selling expenses. How can i file my 2010 taxes Selling expenses. How can i file my 2010 taxes   Selling expenses include: Commissions, Advertising fees, Legal fees, and Loan charges paid by the seller, such as loan placement fees or “points. How can i file my 2010 taxes ” Adjusted Basis While you owned your home, you may have made adjustments (increases or decreases) to the basis. How can i file my 2010 taxes This adjusted basis must be determined before you can figure gain or loss on the sale of your home. How can i file my 2010 taxes For information on how to figure your home's adjusted basis, see Determining Basis , later. How can i file my 2010 taxes Amount of Gain or Loss To figure the amount of gain or loss, compare the amount realized to the adjusted basis. How can i file my 2010 taxes Gain on sale. How can i file my 2010 taxes   If the amount realized is more than the adjusted basis, the difference is a gain and, except for any part you can exclude, generally is taxable. How can i file my 2010 taxes Loss on sale. How can i file my 2010 taxes   If the amount realized is less than the adjusted basis, the difference is a loss. How can i file my 2010 taxes Generally, a loss on the sale of your main home cannot be deducted. How can i file my 2010 taxes Jointly owned home. How can i file my 2010 taxes   If you and your spouse sell your jointly owned home and file a joint return, you figure your gain or loss as one taxpayer. How can i file my 2010 taxes Separate returns. How can i file my 2010 taxes   If you file separate returns, each of you must figure your own gain or loss according to your ownership interest in the home. How can i file my 2010 taxes Your ownership interest is generally determined by state law. How can i file my 2010 taxes Joint owners not married. How can i file my 2010 taxes   If you and a joint owner other than your spouse sell your jointly owned home, each of you must figure your own gain or loss according to your ownership interest in the home. How can i file my 2010 taxes Each of you applies the rules discussed in this publication on an individual basis. How can i file my 2010 taxes Dispositions Other Than Sales Some special rules apply to other dispositions of your main home. How can i file my 2010 taxes Foreclosure or repossession. How can i file my 2010 taxes   If your home was foreclosed on or repossessed, you have a disposition. How can i file my 2010 taxes See Publication 4681 to determine if you have ordinary income, gain, or loss. How can i file my 2010 taxes More information. How can i file my 2010 taxes   If part of a home is used for business or rental purposes, see Foreclosures and Repossessions in chapter 1 of Publication 544 for more information. How can i file my 2010 taxes Publication 544 has examples of how to figure gain or loss on a foreclosure or repossession. How can i file my 2010 taxes Abandonment. How can i file my 2010 taxes   If you abandon your home, see Publication 4681 to determine if you have ordinary income, gain, or loss. How can i file my 2010 taxes Trading (exchanging) homes. How can i file my 2010 taxes   If you trade your home for another home, treat the trade as a sale and a purchase. How can i file my 2010 taxes Example. How can i file my 2010 taxes You owned and lived in a home with an adjusted basis of $41,000. How can i file my 2010 taxes A real estate dealer accepted your old home as a trade-in and allowed you $50,000 toward a new home priced at $80,000. How can i file my 2010 taxes This is treated as a sale of your old home for $50,000 with a gain of $9,000 ($50,000 − $41,000). How can i file my 2010 taxes If the dealer had allowed you $27,000 and assumed your unpaid mortgage of $23,000 on your old home, your sales price would still be $50,000 (the $27,000 trade-in allowed plus the $23,000 mortgage assumed). How can i file my 2010 taxes Transfer to spouse. How can i file my 2010 taxes   If you transfer your home to your spouse or you transfer it to your former spouse incident to your divorce, you in most cases have no gain or loss (unless the Exception, discussed next, applies). How can i file my 2010 taxes This is true even if you receive cash or other consideration for the home. How can i file my 2010 taxes As a result, the rules explained in this publication do not apply. How can i file my 2010 taxes   If you owned your home jointly with your spouse and transfer your interest in the home to your spouse, or to your former spouse incident to your divorce, the same rule applies. How can i file my 2010 taxes You have no gain or loss. How can i file my 2010 taxes Exception. How can i file my 2010 taxes   These transfer rules do not apply if your spouse or former spouse is a nonresident alien. How can i file my 2010 taxes In that case, you generally will have a gain or loss. How can i file my 2010 taxes More information. How can i file my 2010 taxes    See Property Settlements in Publication 504, Divorced or Separated Individuals, for more information. How can i file my 2010 taxes Involuntary conversion. How can i file my 2010 taxes   You have a disposition when your home is destroyed or condemned and you receive other property or money in payment, such as insurance or a condemnation award. How can i file my 2010 taxes This is treated as a sale and you may be able to exclude all or part of any gain from the destruction or condemnation of your home, as explained later under Special Situations (see Home destroyed or condemned ). How can i file my 2010 taxes Determining Basis You need to know your basis in your home to figure any gain or loss when you sell it. How can i file my 2010 taxes Your basis in your home is determined by how you got the home. How can i file my 2010 taxes Generally, your basis is its cost if you bought it or built it. How can i file my 2010 taxes If you got it in some other way (inheritance, gift, etc. How can i file my 2010 taxes ), your basis is generally either its fair market value when you received it or the adjusted basis of the previous owner. How can i file my 2010 taxes While you owned your home, you may have made adjustments (increases or decreases) to your home's basis. How can i file my 2010 taxes The result of these adjustments is your home's adjusted basis, which is used to figure gain or loss on the sale of your home. How can i file my 2010 taxes To figure your adjusted basis, you can use Worksheet 1, near the end of this publication. How can i file my 2010 taxes Filled-in examples of that worksheet are included in the Comprehensive Examples , later. How can i file my 2010 taxes Cost As Basis The cost of property is the amount you paid for it in cash, debt obligations, other property, or services. How can i file my 2010 taxes Purchase. How can i file my 2010 taxes   If you bought your home, your basis is its cost to you. How can i file my 2010 taxes This includes the purchase price and certain settlement or closing costs. How can i file my 2010 taxes In most cases, your purchase price includes your down payment and any debt, such as a first or second mortgage or notes you gave the seller in payment for the home. How can i file my 2010 taxes If you build, or contract to build, a new home, your purchase price can include costs of construction, as discussed later. How can i file my 2010 taxes Seller-paid points. How can i file my 2010 taxes   If the person who sold you your home paid points on your loan, you may have to reduce your home's basis by the amount of the points, as shown in the following chart. How can i file my 2010 taxes    IF you bought your home. How can i file my 2010 taxes . How can i file my 2010 taxes . How can i file my 2010 taxes THEN reduce your home's basis by the seller-paid points. How can i file my 2010 taxes . How can i file my 2010 taxes . How can i file my 2010 taxes after 1990 but before April 4, 1994 only if you deducted them as home mortgage interest in the year paid. How can i file my 2010 taxes after April 3, 1994 even if you did not deduct them. How can i file my 2010 taxes Settlement fees or closing costs. How can i file my 2010 taxes   When you bought your home, you may have paid settlement fees or closing costs in addition to the contract price of the property. How can i file my 2010 taxes You can include in your basis some of the settlement fees and closing costs you paid for buying the home, but not the fees and costs for getting a mortgage loan. How can i file my 2010 taxes A fee paid for buying the home is any fee you would have had to pay even if you paid cash for the home (that is, without the need for financing). How can i file my 2010 taxes   Settlement fees do not include amounts placed in escrow for the future payment of items such as taxes and insurance. How can i file my 2010 taxes   Some of the settlement fees or closing costs that you can include in your basis are: Abstract fees (abstract of title fees), Charges for installing utility services, Legal fees (including fees for the title search and preparing the sales contract and deed), Recording fees, Survey fees, Transfer or stamp taxes, Owner's title insurance, and Any amounts the seller owes that you agree to pay, such as: Certain real estate taxes (discussed later), Back interest, Recording or mortgage fees, Charges for improvements or repairs, and Sales commissions. How can i file my 2010 taxes   Some settlement fees and closing costs you cannot include in your basis are: Fire insurance premiums, Rent for occupancy of the house before closing, Charges for utilities or other services related to occupancy of the house before closing, Any fee or cost that you deducted as a moving expense (allowed for certain fees and costs before 1994), Charges connected with getting a mortgage loan, such as: Mortgage insurance premiums (including funding fees connected with loans guaranteed by the Department of Veterans Affairs), Loan assumption fees, Cost of a credit report, Fee for an appraisal required by a lender, and Fees for refinancing a mortgage. How can i file my 2010 taxes Real estate taxes. How can i file my 2010 taxes   Real estate taxes for the year you bought your home may affect your basis, as shown in the following chart. How can i file my 2010 taxes    IF. How can i file my 2010 taxes . How can i file my 2010 taxes . How can i file my 2010 taxes AND. How can i file my 2010 taxes . How can i file my 2010 taxes . How can i file my 2010 taxes THEN the taxes. How can i file my 2010 taxes . How can i file my 2010 taxes . How can i file my 2010 taxes you pay taxes that the seller owed on the home up to the date of sale the seller does not reimburse you are added to the basis of your home. How can i file my 2010 taxes the seller reimburses you do not affect the basis of your home. How can i file my 2010 taxes the seller pays taxes for you (taxes owed beginning on the date of sale) you do not reimburse the seller are subtracted from the basis of your home. How can i file my 2010 taxes you reimburse the seller do not affect the basis of your home. How can i file my 2010 taxes Construction. How can i file my 2010 taxes   If you contracted to have your house built on land you own, your basis is: The cost of the land, plus The amount it cost you to complete the house, including: The cost of labor and materials, Any amounts paid to a contractor, Any architect's fees, Building permit charges, Utility meter and connection charges, and Legal fees directly connected with building the house. How can i file my 2010 taxes   Your cost includes your down payment and any debt such as a first or second mortgage or notes you gave the seller or builder. How can i file my 2010 taxes It also includes certain settlement or closing costs. How can i file my 2010 taxes You may have to reduce your basis by points the seller paid for you. How can i file my 2010 taxes For more information, see Seller-paid points and Settlement fees or closing costs , earlier. How can i file my 2010 taxes Built by you. How can i file my 2010 taxes   If you built all or part of your house yourself, its basis is the total amount it cost you to complete it. How can i file my 2010 taxes Do not include in the cost of the house: The value of your own labor, or The value of any other labor you did not pay for. How can i file my 2010 taxes Temporary housing. How can i file my 2010 taxes   If a builder gave you temporary housing while your home was being finished, you must reduce your basis by the part of the contract price that was for the temporary housing. How can i file my 2010 taxes To figure the amount of the reduction, multiply the contract price by a fraction. How can i file my 2010 taxes The numerator is the value of the temporary housing, and the denominator is the sum of the value of the temporary housing plus the value of the new home. How can i file my 2010 taxes Cooperative apartment. How can i file my 2010 taxes   If you are a tenant-stockholder in a cooperative housing corporation, your basis in the cooperative apartment used as your home is usually the cost of your stock in the corporation. How can i file my 2010 taxes This may include your share of a mortgage on the apartment building. How can i file my 2010 taxes Condominium. How can i file my 2010 taxes   To determine your basis in a condominium apartment used as your home, use the same rules as for any other home. How can i file my 2010 taxes Basis Other Than Cost You must use a basis other than cost, such as adjusted basis or fair market value, if you received your home as a gift, inheritance, a trade, or from your spouse. How can i file my 2010 taxes These situations are discussed in the following pages. How can i file my 2010 taxes Also, the instructions for Worksheet 1 (near the end of the publication) address each of these issues. How can i file my 2010 taxes Other special rules may apply in certain situations. How can i file my 2010 taxes If you converted the property, or some part of it, to business or rental use, see Property Changed to Business or Rental Use, in Publication 551. How can i file my 2010 taxes Home received as gift. How can i file my 2010 taxes   Use the following chart to find the basis of a home you received as a gift. How can i file my 2010 taxes IF the donor's adjusted basis at the time of the gift was. How can i file my 2010 taxes . How can i file my 2010 taxes . How can i file my 2010 taxes THEN your basis is. How can i file my 2010 taxes . How can i file my 2010 taxes . How can i file my 2010 taxes more than the fair market value of the home at that time the same as the donor's adjusted basis at the time of the gift. How can i file my 2010 taxes   Exception: If using the donor's adjusted basis results in a loss when you sell the home, you must use the fair market value of the home at the time of the gift as your basis. How can i file my 2010 taxes If using the fair market value results in a gain, you have neither gain nor loss. How can i file my 2010 taxes equal to or less than the fair market value at that time, and you received the gift before 1977 the smaller of the: • donor's adjusted basis, plus  any federal gift tax paid on  the gift, or • the home's fair market value  at the time of the gift. How can i file my 2010 taxes equal to or less than the fair market value at that time, and you received the gift after 1976 the same as the donor's adjusted basis, plus the part of any federal gift tax paid that is due to the net increase in value of the home (explained next). How can i file my 2010 taxes Fair market value. How can i file my 2010 taxes   The fair market value of property at the time of the gift is the value of the property as appraised for purposes of the federal gift tax. How can i file my 2010 taxes If the gift was not subject to the federal gift tax, the fair market value is the value as appraised for the purposes of a state gift tax. How can i file my 2010 taxes Part of federal gift tax due to net increase in value. How can i file my 2010 taxes   Figure the part of the federal gift tax paid that is due to the net increase in value of the home by multiplying the total federal gift tax paid by a fraction. How can i file my 2010 taxes The numerator of the fraction is the net increase in the value of the home, and the denominator is the value of the home for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. How can i file my 2010 taxes The net increase in the value of the home is its fair market value minus the donor's adjusted basis immediately before the gift. How can i file my 2010 taxes Home acquired from a decedent who died before or after 2010. How can i file my 2010 taxes   If you inherited your home from a decedent who died before or after 2010, your basis is the fair market value of the property on the date of the decedent's death (or the later alternate valuation date chosen by the personal representative of the estate). How can i file my 2010 taxes If an estate tax return was filed or required to be filed, the value of the property listed on the estate tax return is your basis. How can i file my 2010 taxes If a federal estate tax return did not have to be filed, your basis in the home is the same as its appraised value at the date of death, for purposes of state inheritance or transmission taxes. How can i file my 2010 taxes Surviving spouse. How can i file my 2010 taxes   If you are a surviving spouse and you owned your home jointly, your basis in the home will change. How can i file my 2010 taxes The new basis for the interest your spouse owned will be its fair market value on the date of death (or alternate valuation date). How can i file my 2010 taxes The basis in your interest will remain the same. How can i file my 2010 taxes Your new basis in the home is the total of these two amounts. How can i file my 2010 taxes   If you and your spouse owned the home either as tenants by the entirety or as joint tenants with right of survivorship, you will each be considered to have owned one-half of the home. How can i file my 2010 taxes Example. How can i file my 2010 taxes Your jointly owned home (owned as joint tenants with right of survivorship) had an adjusted basis of $50,000 on the date of your spouse's death, and the fair market value on that date was $100,000. How can i file my 2010 taxes Your new basis in the home is $75,000 ($25,000 for one-half of the adjusted basis plus $50,000 for one-half of the fair market value). How can i file my 2010 taxes Community property. How can i file my 2010 taxes   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), each spouse is usually considered to own half of the community property. How can i file my 2010 taxes When either spouse dies, the total fair market value of the community property becomes the basis of the entire property, including the part belonging to the surviving spouse. How can i file my 2010 taxes For this to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return. How can i file my 2010 taxes   For more information about community property, see Publication 555, Community Property. How can i file my 2010 taxes    If you are selling a home in which you acquired an interest from a decedent who died in 2010, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, to determine your basis. How can i file my 2010 taxes Home received as trade. How can i file my 2010 taxes   If you acquired your home as a trade for other property, in most cases, the basis of your home is the fair market value (at the time of the trade) of the property you gave up. How can i file my 2010 taxes If you traded one home for another, you have made a sale and purchase. How can i file my 2010 taxes In that case, you may have a gain. How can i file my 2010 taxes See Trading (exchanging) homes under Dispositions Other Than Sales, earlier, for an example of figuring the gain. How can i file my 2010 taxes Home received from spouse. How can i file my 2010 taxes   If you received your home from your spouse or from your former spouse incident to your divorce, your basis in the home depends on the date of the transfer. How can i file my 2010 taxes Transfers after July 18, 1984. How can i file my 2010 taxes   If you received the home after July 18, 1984, there was no gain or loss on the transfer. How can i file my 2010 taxes In most cases, your basis in this home is the same as your spouse's (or former spouse's) adjusted basis just before you received it. How can i file my 2010 taxes This rule applies even if you received the home in exchange for cash, the release of marital rights, the assumption of liabilities, or other considerations. How can i file my 2010 taxes   If you owned a home jointly with your spouse and your spouse transferred his or her interest in the home to you, in most cases, your basis in the half interest received from your spouse is the same as your spouse's adjusted basis just before the transfer. How can i file my 2010 taxes This also applies if your former spouse transferred his or her interest in the home to you incident to your divorce. How can i file my 2010 taxes Your basis in the half interest you already owned does not change. How can i file my 2010 taxes Your new basis in the home is the total of these two amounts. How can i file my 2010 taxes Transfers before July 19, 1984. How can i file my 2010 taxes   If you received your home before July 19, 1984, in exchange for your release of marital rights, in most cases, your basis in the home is generally its fair market value at the time you received it. How can i file my 2010 taxes More information. How can i file my 2010 taxes   For more information on property received from a spouse or former spouse, see Property Settlements in Publication 504. How can i file my 2010 taxes Involuntary conversion. How can i file my 2010 taxes   If your home is destroyed or condemned, you may receive insurance proceeds or a condemnation award. How can i file my 2010 taxes If you acquired a replacement home with these proceeds, the basis is its cost decreased by any gain not recognized on the conversion under the rules explained in: Publication 547, in the case of a home that was destroyed, or Chapter 1 of Publication 544, in the case of a home that was condemned. How can i file my 2010 taxes Example. How can i file my 2010 taxes A fire destroyed your home that you owned and used for only 6 months. How can i file my 2010 taxes The home had an adjusted basis of $80,000 and the insurance company paid you $130,000 for the loss. How can i file my 2010 taxes Your gain is $50,000 ($130,000 − $80,000). How can i file my 2010 taxes You bought a replacement home for $100,000. How can i file my 2010 taxes The part of your gain that is taxable is $30,000 ($130,000 − $100,000), the unspent part of the payment from the insurance company. How can i file my 2010 taxes The rest of the gain ($20,000) is not taxable, so that amount reduces your basis in the new home. How can i file my 2010 taxes The basis of the new home is figured as follows. How can i file my 2010 taxes Cost of replacement home $100,000 Minus: Gain not recognized 20,000 Basis of the replacement home $80,000 More information. How can i file my 2010 taxes   For more information about basis, see Publication 551. How can i file my 2010 taxes Adjusted Basis Adjusted basis is your cost or other basis increased or decreased by certain amounts. How can i file my 2010 taxes To figure your adjusted basis, you can use Worksheet 1, found toward the end of this publication. How can i file my 2010 taxes Filled-in examples of that worksheet are included in Comprehensive Examples , later. How can i file my 2010 taxes Recordkeeping. How can i file my 2010 taxes You should keep records to prove your home's adjusted basis. How can i file my 2010 taxes Ordinarily, you must keep records for 3 years after the due date for filing your return for the tax year in which you sold your home. How can i file my 2010 taxes But if you sold a home before May 7, 1997, and postponed tax on any gain, the basis of that home affects the basis of the new home you bought. How can i file my 2010 taxes Keep records proving the basis of both homes as long as they are needed for tax purposes. How can i file my 2010 taxes The records you should keep include: Proof of the home's purchase price and purchase expenses; Receipts and other records for all improvements, additions, and other items that affect the home's adjusted basis; Any worksheets or other computations you used to figure the adjusted basis of the home you sold, the gain or loss on the sale, the exclusion, and the taxable gain; Any Form 982 you filed to exclude any discharge of qualified principal residence indebtedness; Any Form 2119, Sale of Your Home, you filed to postpone gain from the sale of a previous home before May 7, 1997; and Any worksheets you used to prepare Form 2119, such as the Adjusted Basis of Home Sold Worksheet or the Capital Improvements Worksheet from the Form 2119 instructions, or other source of computations. How can i file my 2010 taxes Increases to Basis These include the following. How can i file my 2010 taxes Additions and other improvements that have a useful life of more than 1 year. How can i file my 2010 taxes Special assessments for local improvements. How can i file my 2010 taxes Amounts you spent after a casualty to restore damaged property. How can i file my 2010 taxes Improvements. How can i file my 2010 taxes   These add to the value of your home, prolong its useful life, or adapt it to new uses. How can i file my 2010 taxes You add the cost of additions and other improvements to the basis of your property. How can i file my 2010 taxes   The following chart lists some other examples of improvements. How can i file my 2010 taxes Examples of Improvements That Increase Basis Additions Bedroom Bathroom Deck Garage Porch Patio Heating & Air Conditioning Heating system Central air conditioning Furnace Duct work Central humidifier Filtration system Lawn & Grounds Landscaping Driveway Walkway Fence  Retaining wall Sprinkler system Swimming pool  Miscellaneous Storm windows, doors New roof Central vacuum Wiring upgrades Satellite dish Security system  Plumbing Septic system Water heater Soft water system Filtration system  Interior Improvements Built-in appliances  Kitchen modernization  Flooring Wall-to-wall carpeting  Insulation Attic Walls Floors Pipes and duct work Improvements no longer part of home. How can i file my 2010 taxes   Your home's adjusted basis does not include the cost of any improvements that are replaced and are no longer part of the home. How can i file my 2010 taxes Example. How can i file my 2010 taxes You put wall-to-wall carpeting in your home 15 years ago. How can i file my 2010 taxes Later, you replaced that carpeting with new wall-to-wall carpeting. How can i file my 2010 taxes The cost of the old carpeting you replaced is no longer part of your home's adjusted basis. How can i file my 2010 taxes Repairs. How can i file my 2010 taxes   These maintain your home in good condition but do not add to its value or prolong its life. How can i file my 2010 taxes You do not add their cost to the basis of your property. How can i file my 2010 taxes Examples. How can i file my 2010 taxes Repainting your house inside or outside, fixing your gutters or floors, repairing leaks or plastering, and replacing broken window panes are examples of repairs. How can i file my 2010 taxes Exception. How can i file my 2010 taxes   The entire job is considered an improvement if items that would otherwise be considered repairs are done as part of an extensive remodeling or restoration of your home. How can i file my 2010 taxes For example, if you have a casualty and your home is damaged, increase your basis by the amount you spend on repairs that restore the property to its pre-casualty condition. How can i file my 2010 taxes Decreases to Basis These include the following. How can i file my 2010 taxes Discharge of qualified principal residence indebtedness that was excluded from income (but not below zero). How can i file my 2010 taxes For details, see Publication 4681. How can i file my 2010 taxes Some or all of the cancellation of debt income that was excluded due to your bankruptcy or insolvency. How can i file my 2010 taxes For details, see Publication 4681. How can i file my 2010 taxes Gain you postponed from the sale of a previous home before May 7, 1997. How can i file my 2010 taxes Deductible casualty losses. How can i file my 2010 taxes Insurance payments you received or expect to receive for casualty losses. How can i file my 2010 taxes Payments you received for granting an easement or right-of-way. How can i file my 2010 taxes Depreciation allowed or allowable if you used your home for business or rental purposes. How can i file my 2010 taxes Energy-related credits allowed for expenditures made on the residence. How can i file my 2010 taxes (Reduce the increase in basis otherwise allowable for expenditures on the residence by the amount of credit allowed for those expenditures. How can i file my 2010 taxes ) Adoption credit you claimed for improvements added to the basis of your home. How can i file my 2010 taxes Nontaxable payments from an adoption assistance program of your employer you used for improvements you added to the basis of your home. How can i file my 2010 taxes Energy conservation subsidy excluded from your gross income because you received it (directly or indirectly) from a public utility after 1992 to buy or install any energy conservation measure. How can i file my 2010 taxes An energy conservation measure is an installation or modification primarily designed either to reduce consumption of electricity or natural gas or to improve the management of energy demand for a home. How can i file my 2010 taxes District of Columbia first-time homebuyer credit allowed on the purchase of a principal residence in the District of Columbia. How can i file my 2010 taxes General sales taxes claimed as an itemized deduction on Schedule A (Form 1040) that were imposed on the purchase of personal property, such as a houseboat used as your home or a mobile home. How can i file my 2010 taxes Discharges of qualified principal residence indebtedness. How can i file my 2010 taxes   You may be able to exclude from gross income a discharge of qualified principal residence indebtedness. How can i file my 2010 taxes This exclusion applies to discharges made after 2006 and before 2014. How can i file my 2010 taxes If you choose to exclude this income, you must reduce (but not below zero) the basis of your principal residence by the amount excluded from gross income. How can i file my 2010 taxes   File Form 982 with your tax return. How can i file my 2010 taxes See the form's instructions for detailed information. How can i file my 2010 taxes    A decrease in basis due to a discharge of qualified principal residence indebtedness that is excluded from income occurs only if you retain ownership of the principal residence after a discharge. How can i file my 2010 taxes In most cases, this would occur in a refinancing or a restructuring of the mortgage. How can i file my 2010 taxes Excluding the Gain You may qualify to exclude from your income all or part of any gain from the sale of your main home. How can i file my 2010 taxes This means that, if you qualify, you will not have to pay tax on the gain up to the limit described under Maximum Exclusion , next. How can i file my 2010 taxes To qualify, you must meet the ownership and use tests described later. How can i file my 2010 taxes You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. How can i file my 2010 taxes This choice can be made (or revoked) at any time before the expiration of a 3-year period beginning on the due date of your return (not including extensions) for the year of the sale. How can i file my 2010 taxes You can use Worksheet 2 (near the end of this publication) to figure the amount of your exclusion and your taxable gain, if any. How can i file my 2010 taxes If you have any taxable gain from the sale of your home, you may have to increase your withholding or make estimated tax payments. How can i file my 2010 taxes See Publication 505, Tax Withholding and Estimated Tax. How can i file my 2010 taxes Maximum Exclusion You can exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. How can i file my 2010 taxes You meet the ownership test. How can i file my 2010 taxes You meet the use test. How can i file my 2010 taxes During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. How can i file my 2010 taxes For details on gain allocated to periods of nonqualified use, see Nonqualified Use , later. How can i file my 2010 taxes If you and another person owned the home jointly but file separate returns, each of you can exclude up to $250,000 of gain from the sale of your interest in the home if each of you meets the three conditions just listed. How can i file my 2010 taxes You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . How can i file my 2010 taxes Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. How can i file my 2010 taxes This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). How can i file my 2010 taxes Exception. How can i file my 2010 taxes   If you owned and lived in the property as your main home for less than 2 years, you can still claim an exclusion in some cases. How can i file my 2010 taxes However, the maximum amount you may be able to exclude will be reduced. How can i file my 2010 taxes See Reduced Maximum Exclusion , later. How can i file my 2010 taxes Example 1—home owned and occupied for at least 2 years. How can i file my 2010 taxes Mya bought and moved into her main home in September 2011. How can i file my 2010 taxes She sold the home at a gain in October 2013. How can i file my 2010 taxes During the 5-year period ending on the date of sale in October 2013, she owned and lived in the home for more than 2 years. How can i file my 2010 taxes She meets the ownership and use tests. How can i file my 2010 taxes Example 2—ownership test met but use test not met. How can i file my 2010 taxes Ayden bought a home, lived in it for 6 months, moved out, and never occupied the home again. How can i file my 2010 taxes He later sold the home for a gain in June 2013. How can i file my 2010 taxes He owned the home during the entire 5-year period ending on the date of sale. How can i file my 2010 taxes He meets the ownership test but not the use test. How can i file my 2010 taxes He cannot exclude any part of his gain on the sale unless he qualified for a reduced maximum exclusion (explained later). How can i file my 2010 taxes Period of Ownership and Use The required 2 years of ownership and use during the 5-year period ending on the date of the sale do not have to be continuous nor do they both have to occur at the same time. How can i file my 2010 taxes You meet the tests if you can show that you owned and lived in the property as your main home for either 24 full months or 730 days (365 × 2) during the 5-year period ending on the date of sale. How can i file my 2010 taxes Example. How can i file my 2010 taxes Naomi bought and moved into a house in July 2009. How can i file my 2010 taxes She lived there for 13 months and then moved in with a friend. How can i file my 2010 taxes She later moved back into her house and lived there for 12 months until she sold it in August 2013. How can i file my 2010 taxes Naomi meets the ownership and use tests because, during the 5-year period ending on the date of sale, she owned the house for more than 2 years and lived in it for a total of 25 (13 + 12) months. How can i file my 2010 taxes Temporary absence. How can i file my 2010 taxes   Short temporary absences for vacations or other seasonal absences, even if you rent out the property during the absences, are counted as periods of use. How can i file my 2010 taxes The following examples assume that the reduced maximum exclusion (discussed later) does not apply to the sales. How can i file my 2010 taxes Example 1. How can i file my 2010 taxes David Johnson, who is single, bought and moved into his home on February 1, 2011. How can i file my 2010 taxes Each year during 2011 and 2012, David left his home for a 2-month summer vacation. How can i file my 2010 taxes David sold the house on March 1, 2013. How can i file my 2010 taxes Although the total time David lived in his home is less than 2 years (21 months), he meets the use requirement and may exclude gain. How can i file my 2010 taxes The 2-month vacations are short temporary absences and are counted as periods of use in determining whether David used the home for the required 2 years. How can i file my 2010 taxes Example 2. How can i file my 2010 taxes Professor Paul Beard, who is single, bought and moved into a house in December 2010, went abroad for a 1-year sabbatical leave in January 2012, returned to the house in January 2013, and sold it at a gain in February 2013. How can i file my 2010 taxes Because his leave was not a short temporary absence, he cannot include the period of leave to meet the 2-year use test. How can i file my 2010 taxes He cannot exclude any part of his gain because he did not use the residence for the required 2 years. How can i file my 2010 taxes Ownership and use tests met at different times. How can i file my 2010 taxes   You can meet the ownership and use tests during different 2-year periods. How can i file my 2010 taxes However, you must meet both tests during the 5-year period ending on the date of the sale. How can i file my 2010 taxes Example. How can i file my 2010 taxes Beginning in 2002, Helen Jones lived in a rented apartment. How can i file my 2010 taxes The apartment building was later converted to condominiums, and she bought her same apartment on December 3, 2010. How can i file my 2010 taxes In 2011, Helen became ill and on April 14 of that year she moved to her daughter's home. How can i file my 2010 taxes On July 12, 2013, while still living in her daughter's home, she sold her condominium. How can i file my 2010 taxes Helen can exclude gain on the sale of her condominium because she met the ownership and use tests during the 5-year period from July 13, 2008, to July 12, 2013, the date she sold the condominium. How can i file my 2010 taxes She owned her condominium from December 3, 2010, to July 12, 2013 (more than 2 years). How can i file my 2010 taxes She lived in the property from July 13, 2008 (the beginning of the 5-year period), to April 14, 2011 (more than 2 years). How can i file my 2010 taxes The time Helen lived in her daughter's home during the 5-year period can be counted toward her period of ownership, and the time she lived in her rented apartment during the 5-year period can be counted toward her period of use. How can i file my 2010 taxes Cooperative apartment. How can i file my 2010 taxes   If you sold stock as a tenant-shareholder in a cooperative housing corporation, the ownership and use tests are met if, during the 5-year period ending on the date of sale, you: Owned the stock for at least 2 years, and Lived in the house or apartment that the stock entitled you to occupy as your main home for at least 2 years. How can i file my 2010 taxes Exceptions to Ownership and Use Tests The following sections contain exceptions to the ownership and use tests for certain taxpayers. How can i file my 2010 taxes Exception for individuals with a disability. How can i file my 2010 taxes   There is an exception to the use test if: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year during the 5-year period before the sale of your home. How can i file my 2010 taxes Under this exception, you are considered to live in your home during any time within the 5-year period that you own the home and live in a facility (including a nursing home) licensed by a state or political subdivision to care for persons in your condition. How can i file my 2010 taxes   If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. How can i file my 2010 taxes Previous home destroyed or condemned. How can i file my 2010 taxes   For the ownership and use tests, you add the time you owned and lived in a previous home that was destroyed or condemned to the time you owned and lived in the replacement home on whose sale you wish to exclude gain. How can i file my 2010 taxes This rule applies if any part of the basis of the home you sold depended on the basis of the destroyed or condemned home (see Involuntary Conversions in Publication 551). How can i file my 2010 taxes Otherwise, you must have owned and lived in the same home for 2 of the 5 years before the sale to qualify for the exclusion. How can i file my 2010 taxes Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps. How can i file my 2010 taxes   You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve on qualified official extended duty (defined later) as a member of the uniformed services or Foreign Service of the United States, or as an employee of the intelligence community. How can i file my 2010 taxes You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve outside the United States either as an employee of the Peace Corps on qualified official extended duty (defined later) or as an enrolled volunteer or volunteer leader of the Peace Corps. How can i file my 2010 taxes This means that you may be able to meet the 2-year use test even if, because of your service, you did not actually live in your home for at least the required 2 years during the 5-year period ending on the date of sale. How can i file my 2010 taxes   If this helps you qualify to exclude gain, you can choose to have the 5-year test period suspended by filing a return for the year of sale that does not include the gain. How can i file my 2010 taxes Example. How can i file my 2010 taxes John bought and moved into a home in 2005. How can i file my 2010 taxes He lived in it as his main home for 2½ years. How can i file my 2010 taxes For the next 6 years, he did not live in it because he was on qualified official extended duty with the Army. How can i file my 2010 taxes He then sold the home at a gain in 2013. How can i file my 2010 taxes To meet the use test, John chooses to suspend the 5-year test period for the 6 years he was on qualified official extended duty. How can i file my 2010 taxes This means he can disregard those 6 years. How can i file my 2010 taxes Therefore, John's 5-year test period consists of the 5 years before he went on qualified official extended duty. How can i file my 2010 taxes He meets the ownership and use tests because he owned and lived in the home for 2½ years during this test period. How can i file my 2010 taxes Period of suspension. How can i file my 2010 taxes   The period of suspension cannot last more than 10 years. How can i file my 2010 taxes Together, the 10-year suspension period and the 5-year test period can be as long as, but no more than, 15 years. How can i file my 2010 taxes You cannot suspend the 5-year period for more than one property at a time. How can i file my 2010 taxes You can revoke your choice to suspend the 5-year period at any time. How can i file my 2010 taxes Example. How can i file my 2010 taxes Mary bought a home on April 1, 1997. How can i file my 2010 taxes She used it as her main home until August 31, 2000. How can i file my 2010 taxes On September 1, 2000, she went on qualified official extended duty with the Navy. How can i file my 2010 taxes She did not live in the house again before selling it on July 31, 2013. How can i file my 2010 taxes Mary chooses to use the entire 10-year suspension period. How can i file my 2010 taxes Therefore, the suspension period would extend back from July 31, 2013, to August 1, 2003, and the 5-year test period would extend back to August 1, 1998. How can i file my 2010 taxes During that period, Mary owned the house all 5 years and lived in it as her main home from August 1, 1998, until August 31, 2000, a period of more than 24 months. How can i file my 2010 taxes She meets the ownership and use tests because she owned and lived in the home for at least 2 years during this test period. How can i file my 2010 taxes Uniformed services. How can i file my 2010 taxes   The uniformed services are: The Armed Forces (the Army, Navy, Air Force, Marine Corps, and Coast Guard), The commissioned corps of the National Oceanic and Atmospheric Administration, and The commissioned corps of the Public Health Service. How can i file my 2010 taxes Foreign Service member. How can i file my 2010 taxes   For purposes of the choice to suspend the 5-year test period for ownership and use, you are a member of the Foreign Service if you are any of the following. How can i file my 2010 taxes A Chief of mission. How can i file my 2010 taxes An Ambassador at large. How can i file my 2010 taxes A member of the Senior Foreign Service. How can i file my 2010 taxes A Foreign Service officer. How can i file my 2010 taxes Part of the Foreign Service personnel. How can i file my 2010 taxes Employee of the intelligence community. How can i file my 2010 taxes   For purposes of the choice to suspend the 5-year test period for ownership and use, you are an employee of the intelligence community if you are an employee of any of the following. How can i file my 2010 taxes The Office of the Director of National Intelligence. How can i file my 2010 taxes The Central Intelligence Agency. How can i file my 2010 taxes The National Security Agency. How can i file my 2010 taxes The Defense Intelligence Agency. How can i file my 2010 taxes The National Geospatial-Intelligence Agency. How can i file my 2010 taxes The National Reconnaissance Office and any other office within the Department of Defense for the collection of specialized national intelligence through reconnaissance programs. How can i file my 2010 taxes Any of the intelligence elements of the Army, the Navy, the Air Force, the Marine Corps, the Federal Bureau of Investigation, the Department of Treasury, the Department of Energy, and the Coast Guard. How can i file my 2010 taxes The Bureau of Intelligence and Research of the Department of State. How can i file my 2010 taxes Any of the elements of the Department of Homeland Security concerned with the analyses of foreign intelligence information. How can i file my 2010 taxes Qualified official extended duty. How can i file my 2010 taxes   You are on qualified official extended duty if you are on extended duty while: Serving at a duty station at least 50 miles from your main home, or Living in Government quarters under Government orders. How can i file my 2010 taxes   You are on extended duty when you are called or ordered to active duty for a period of more than 90 days or for an indefinite period. How can i file my 2010 taxes Married Persons If you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use tests, you can exclude up to $250,000 of the gain. How can i file my 2010 taxes (But see Special rules for joint returns, next. How can i file my 2010 taxes ) Special rules for joint returns. How can i file my 2010 taxes   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. How can i file my 2010 taxes You are married and file a joint return for the year. How can i file my 2010 taxes Either you or your spouse meets the ownership test. How can i file my 2010 taxes Both you and your spouse meet the use test. How can i file my 2010 taxes During the 2-year period ending on the date of the sale, neither you nor your spouse excluded gain from the sale of another home. How can i file my 2010 taxes If either spouse does not satisfy all these requirements, the maximum exclusion that can be claimed by the couple is the total of the maximum exclusions that each spouse would qualify for if not married and the amounts were figured separately. How can i file my 2010 taxes For this purpose, each spouse is treated as owning the property during the period that either spouse owned the property. How can i file my 2010 taxes Example 1—one spouse sells a home. How can i file my 2010 taxes Emily sells her home in June 2013 for a gain of $300,000. How can i file my 2010 taxes She marries Jamie later in the year. How can i file my 2010 taxes She meets the ownership and use tests, but Jamie does not. How can i file my 2010 taxes Emily can exclude up to $250,000 of gain on a separate or joint return for 2013. How can i file my 2010 taxes The $500,000 maximum exclusion for certain joint returns does not apply because Jamie does not meet the use test. How can i file my 2010 taxes Example 2—each spouse sells a home. How can i file my 2010 taxes The facts are the same as in Example 1 except that Jamie also sells a home in 2013 for a gain of $200,000 before he marries Emily. How can i file my 2010 taxes He meets the ownership and use tests on his home, but Emily does not. How can i file my 2010 taxes Emily can exclude $250,000 of gain and Jamie can exclude $200,000 of gain on the respective sales of their individual homes. How can i file my 2010 taxes However, Emily cannot use Jamie's unused exclusion to exclude more than $250,000 of gain. How can i file my 2010 taxes Therefore, Emily and Jamie must recognize $50,000 of gain on the sale of Emily's home. How can i file my 2010 taxes The $500,000 maximum exclusion for certain joint returns does not apply because Emily and Jamie do not both meet the use test for the same home. How can i file my 2010 taxes Sale of main home by surviving spouse. How can i file my 2010 taxes   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. How can i file my 2010 taxes   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. How can i file my 2010 taxes The sale or exchange took place after 2008. How can i file my 2010 taxes The sale or exchange took place no more than 2 years after the date of death of your spouse. How can i file my 2010 taxes You have not remarried. How can i file my 2010 taxes You and your spouse met the use test at the time of your spouse's death. How can i file my 2010 taxes You or your spouse met the ownership test at the time of your spouse's death. How can i file my 2010 taxes Neither you nor your spouse excluded gain from the sale of another home during the last 2 years before the date of death. How can i file my 2010 taxes The ownership and use tests were described earlier. How can i file my 2010 taxes Example. How can i file my 2010 taxes Harry owned and used a house as his main home since 2009. How can i file my 2010 taxes Harry and Wilma married on July 1, 2013, and from that date they used Harry's house as their main home. How can i file my 2010 taxes Harry died on August 15, 2013, and Wilma inherited the property. How can i file my 2010 taxes Wilma sold the property on September 1, 2013, at which time she had not remarried. How can i file my 2010 taxes Although Wilma owned and used the house for less than 2 years, Wilma is considered to have satisfied the ownership and use tests because her period of ownership and use includes the period that Harry owned and used the property before death. How can i file my 2010 taxes Home transferred from spouse. How can i file my 2010 taxes   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. How can i file my 2010 taxes Use of home after divorce. How can i file my 2010 taxes   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. How can i file my 2010 taxes Reduced Maximum Exclusion If you fail to meet the requirements to qualify for the $250,000 or $500,000 exclusion, you may still qualify for a reduced exclusion. How can i file my 2010 taxes This applies to those who: Fail to meet the ownership and use tests, or Have used the exclusion within 2 years of selling their current home. How can i file my 2010 taxes In both cases, to qualify for a reduced exclusion, the sale of your main home must be due to one of the following reasons. How can i file my 2010 taxes A change in place of employment. How can i file my 2010 taxes Health. How can i file my 2010 taxes Unforeseen circumstances. How can i file my 2010 taxes Qualified individual. How can i file my 2010 taxes   For purposes of the reduced maximum exclusion, a qualified individual is any of the following. How can i file my 2010 taxes You. How can i file my 2010 taxes Your spouse. How can i file my 2010 taxes A co-owner of the home. How can i file my 2010 taxes A person whose main home is the same as yours. How can i file my 2010 taxes Primary reason for sale. How can i file my 2010 taxes   One of the three reasons above will be considered to be the primary reason you sold your home if either (1) or (2) is true. How can i file my 2010 taxes You qualify under a “safe harbor. How can i file my 2010 taxes ” This is a specific set of facts and circumstances that, if applicable, qualifies you to claim a reduced maximum exclusion. How can i file my 2010 taxes Safe harbors corresponding to the reasons listed above are described later. How can i file my 2010 taxes A safe harbor does not apply, but you can establish, based on facts and circumstances, that the primary reason for the sale is a change in place of employment, health, or unforeseen circumstances. How can i file my 2010 taxes  Factors that may be relevant in determining your primary reason for sale include whether: Your sale and the circumstances causing it were close in time, The circumstances causing your sale occurred during the time you owned and used the property as your main home, The circumstances causing your sale were not reasonably foreseeable when you began using the property as your main home, Your financial ability to maintain the property became materially impaired, The suitability of the property as your main home materially changed, and During the time you owned the property, you used it as your home. How can i file my 2010 taxes Change in Place of Employment You may qualify for a reduced exclusion if the primary reason for the sale of your main home is a change in the location of employment of a qualified individual. How can i file my 2010 taxes Employment. How can i file my 2010 taxes   For this purpose, employment includes the start of work with a new employer or continuation of work with the same employer. How can i file my 2010 taxes It also includes the start or continuation of self-employment. How can i file my 2010 taxes Distance safe harbor. How can i file my 2010 taxes   A change in place of employment is considered to be the reason you sold your home if: The change occurred during the period you owned and used the property as your main home, and The new place of employment is at least 50 miles farther from the home you sold than was the former place of employment (or, if there was no former place of employment, the distance between your new place of employment and the home sold is at least 50 miles). How can i file my 2010 taxes Example. How can i file my 2010 taxes Justin was unemployed and living in a townhouse in Florida he had owned and used as his main home since 2012. How can i file my 2010 taxes He got a job in North Carolina and sold his townhouse in 2013. How can i file my 2010 taxes Because the distance between Justin's new place of employment and the home he sold is at least 50 miles, the sale satisfies the conditions of the distance safe harbor. How can i file my 2010 taxes Justin's sale of his home is considered to be because of a change in place of employment, and he is entitled to claim a reduced maximum exclusion of gain from the sale. How can i file my 2010 taxes Health The sale of your main home is because of health if your primary reason for the sale is: To obtain, provide, or facilitate the diagnosis, cure, mitigation, or treatment of disease, illness, or injury of a qualified individual, or To obtain or provide medical or personal care for a qualified individual suffering from a disease, illness, or injury. How can i file my 2010 taxes The sale of your home is not because of health if the sale merely benefits a qualified individual's general health or well-being. How can i file my 2010 taxes For purposes of this reason, a qualified individual includes, in addition to the individuals listed earlier under Qualified individual , any of the following family members of these individuals. How can i file my 2010 taxes Parent, grandparent, stepmother, stepfather. How can i file my 2010 taxes Child, grandchild, stepchild, adopted child, eligible foster child. How can i file my 2010 taxes Brother, sister, stepbrother, stepsister, half-brother, half-sister. How can i file my 2010 taxes Mother-in-law, father-in-law, brother-in-law, sister-in-law, son-in-law, or daughter-in-law. How can i file my 2010 taxes Uncle, aunt, nephew, niece, or cousin. How can i file my 2010 taxes Example. How can i file my 2010 taxes In 2012, Chase and Lauren, spouses, bought a house that they used as their main home. How can i file my 2010 taxes Lauren's father has a chronic disease and is unable to care for himself. How can i file my 2010 taxes In 2013, Chase and Lauren sold their home in order to move into Lauren's father's house to provide care for him. How can i file my 2010 taxes Because the primary reason for the sale of their home was to provide care for Lauren's father, Chase and Lauren are entitled to a reduced maximum exclusion. How can i file my 2010 taxes Doctor's recommendation safe harbor. How can i file my 2010 taxes   Health is considered to be the reason you sold your home if, for one or more of the reasons listed at the beginning of this discussion, a doctor recommends a change of residence. How can i file my 2010 taxes Unforeseen Circumstances The sale of your main home is because of an unforeseen circumstance if your primary reason for the sale is the occurrence of an event that you could not reasonably have anticipated before buying and occupying that home. How can i file my 2010 taxes You are not considered to have an unforeseen circumstance if the primary reason you sold your home was that you preferred to get a different home or because your finances improved. How can i file my 2010 taxes Specific event safe harbors. How can i file my 2010 taxes   Unforeseen circumstances are considered to be the reason for selling your home if any of the following events occurred while you owned and used the property as your main home. How can i file my 2010 taxes An involuntary conversion of your home, such as when your home is destroyed or condemned. How can i file my 2010 taxes Natural or man-made disasters or acts of war or terrorism resulting in a casualty to your home, whether or not your loss is deductible. How can i file my 2010 taxes In the case of qualified individuals (listed earlier under Qualified individual ): Death, Unemployment (if the individual is eligible for unemployment compensation), A change in employment or self-employment status that results in the individual's inability to pay reasonable basic living expenses (listed under Reasonable basic living expenses , later) for his or her household, Divorce or legal separation under a decree of divorce or separate maintenance, or Multiple births resulting from the same pregnancy. How can i file my 2010 taxes An event the IRS determined to be an unforeseen circumstance in published guidance of general applicability. How can i file my 2010 taxes For example, the IRS determined the September 11, 2001, terrorist attacks to be an unforeseen circumstance. How can i file my 2010 taxes Reasonable basic living expenses. How can i file my 2010 taxes   Reasonable basic living expenses for your household include the following. How can i file my 2010 taxes Amounts spent for food. How can i file my 2010 taxes Amounts spent for clothing. How can i file my 2010 taxes Housing and related expenses. How can i file my 2010 taxes Medical expenses. How can i file my 2010 taxes Transportation expenses. How can i file my 2010 taxes Tax payments. How can i file my 2010 taxes Court-ordered payments. How can i file my 2010 taxes Expenses reasonably necessary to produce income. How can i file my 2010 taxes   Any of these amounts spent to maintain an affluent or luxurious standard of living are not reasonable basic living expenses. How can i file my 2010 taxes Nonqualified Use Gain from the sale or exchange of the main home is not excludable from income if it is allocable to periods of nonqualified use. How can i file my 2010 taxes Nonqualified use means any period after 2008 where neither you nor your spouse (or your former spouse) used the property as a main home, with certain exceptions (see next). How can i file my 2010 taxes Exceptions. How can i file my 2010 taxes   A period of nonqualified use does not include: Any portion of the 5-year period ending on the date of the sale or exchange after the last date you (or your spouse) use the property as a main home; Any period (not to exceed an aggregate period of 10 years) during which you (or your spouse) are serving on qualified official extended duty: As a member of the uniformed services; As a member of the Foreign Service of the United States; or As an employee of the intelligence community; and Any other period of temporary absence (not to exceed an aggregate period of 2 years) due to change of employment, health conditions, or such other unforeseen circumstances as may be specified by the IRS. How can i file my 2010 taxes Calculation. How can i file my 2010 taxes   To figure the portion of the gain allocated to the period of nonqualified use, multiply the gain (net of any depreciation allowed or allowable on the property for periods after May 6, 1997) by the following fraction:   Total nonqualified use during the period of ownership after 2008     Total period of ownership     This calculation can be found in Worksheet 2, line 10, later in this publication. How can i file my 2010 taxes   For examples of this calculation, see Business Use or Rental of Home , next. How can i file my 2010 taxes Business Use or Rental of Home You may be able to exclude gain from the sale of a home you have used for business or to produce rental income if you meet the ownership and use tests. How can i file my 2010 taxes Example 1. How can i file my 2010 taxes On May 23, 2007, Amy, who is unmarried for all years in this example, bought a house. How can i file my 2010 taxes She moved in on that date and lived in it until May 31, 2009, when she moved out of the house and put it up for rent. How can i file my 2010 taxes The house was rented from June 1, 2009, to March 31, 2011. How can i file my 2010 taxes Amy claimed depreciation deductions in 2009 through 2011 totaling $10,000. How can i file my 2010 taxes Amy moved back into the house on April 1, 2011, and lived there until she sold it on January 31, 2013, for a gain of $200,000. How can i file my 2010 taxes During the 5-year period ending on the date of the sale (January 31, 2008–January 31, 2013), Amy owned and lived in the house for more than 2 years as shown in the following table. How can i file my 2010 taxes Five-Year Period Used as Home Used as Rental 1/31/08 – 5/31/09 16 months   6/01/09 – 3/31/11   22 months 4/01/11 – 1/31/13 22 months     38 months 22 months       During the period Amy owned the house (2,080 days), her period of nonqualified use was 668 days. How can i file my 2010 taxes Because the gain attributable to periods of nonqualified use is $60,990, Amy can exclude $129,010 of her gain, as shown on Worksheet 2. How can i file my 2010 taxes Example 2. How can i file my 2010 taxes William owned and used a house as his main home from 2007 through 2010. How can i file my 2010 taxes On January 1, 2011, he moved to another state. How can i file my 2010 taxes He rented his house from that date until April 30, 2013, when he sold it. How can i file my 2010 taxes During the 5-year period ending on the date of sale (May 1, 2008-April 30, 2013), William owned and lived in the house for more than 2 years. How can i file my 2010 taxes Because it was rental property at the time of the sale, he must report the sale on Form 4797. How can i file my 2010 taxes Because the period of nonqualified use does not include any part of the 5-year period after the last date William lived in the house, he has no period of nonqualified use. How can i file my 2010 taxes Because he met the ownership and use tests, he can exclude gain up to $250,000. How can i file my 2010 taxes However, he cannot exclude the part of the gain equal to the depreciation he claimed or could have claimed for renting the house, as explained next. How can i file my 2010 taxes Depreciation after May 6, 1997. How can i file my 2010 taxes   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. How can i file my 2010 taxes If you can show by adequate records or other evidence that the depreciation allowed was less than the amount allowable, then you may limit the amount of gain recognized to the depreciation allowed. How can i file my 2010 taxes Unrecaptured section 1250 gain. How can i file my 2010 taxes   This is the part of any long-term capital gain from the sale of your home that is due to depreciation and cannot be excluded. How can i file my 2010 taxes To figure the amount of unrecaptured section 1250 gain to be reported on Schedule D (Form 1040), you must also take into account certain gains or losses from the sale of property other than your home. How can i file my 2010 taxes Use the Unrecaptured Section 1250 Gain Worksheet in the Schedule D instructions for this purpose. How can i file my 2010 taxes Worksheet 2. How can i file my 2010 taxes Taxable Gain on Sale of Home—Completed Example 1 for Amy Part 1. How can i file my 2010 taxes Gain or (Loss) on Sale       1. How can i file my 2010 taxes   Selling price of home 1. How can i file my 2010 taxes     2. How can i file my 2010 taxes   Selling expenses (including commissions, advertising and legal fees, and seller-paid loan charges) 2. How can i file my 2010 taxes     3. How can i file my 2010 taxes   Subtract line 2 from line 1. How can i file my 2010 taxes This is the amount realized 3. How can i file my 2010 taxes     4. How can i file my 2010 taxes   Adjusted basis of home sold (from Worksheet 1, line 13) 4. How can i file my 2010 taxes     5. How can i file my 2010 taxes   Gain or (loss) on the sale. How can i file my 2010 taxes Subtract line 4 from line 3. How can i file my 2010 taxes If this is a loss, stop here 5. How can i file my 2010 taxes 200,000   Part 2. How can i file my 2010 taxes Exclusion and Taxable Gain       6. How can i file my 2010 taxes   Enter any depreciation allowed or allowable on the property for periods after May 6, 1997. How can i file my 2010 taxes If none, enter -0- 6. How can i file my 2010 taxes 10,000   7. How can i file my 2010 taxes   Subtract line 6 from line 5. How can i file my 2010 taxes If the result is less than zero, enter -0- 7. How can i file my 2010 taxes 190,000   8. How can i file my 2010 taxes   Aggregate number of days of nonqualified use after 2008. How can i file my 2010 taxes If none, enter -0-. How can i file my 2010 taxes  If line 8 is equal to zero, skip to line 12 and enter the amount from line 7 on line 12 8. How can i file my 2010 taxes 668   9. How can i file my 2010 taxes   Number of days taxpayer owned the property 9. How can i file my 2010 taxes 2,080   10. How can i file my 2010 taxes   Divide the amount on line 8 by the amount on line 9. How can i file my 2010 taxes Enter the result as a decimal (rounded to at least 3 places). How can i file my 2010 taxes But do not enter an amount greater than 1. How can i file my 2010 taxes 00 10. How can i file my 2010 taxes 0. How can i file my 2010 taxes 321   11. How can i file my 2010 taxes   Gain allocated to nonqualified use. How can i file my 2010 taxes (Line 7 multiplied by line 10) 11. How can i file my 2010 taxes 60,990   12. How can i file my 2010 taxes   Gain eligible for exclusion. How can i file my 2010 taxes Subtract line 11 from line 7 12. How can i file my 2010 taxes 129,010   13. How can i file my 2010 taxes   If you qualify to exclude gain on the sale, enter your maximum exclusion (see Maximum Exclusion ). How can i file my 2010 taxes  If you qualify for a reduced maximum exclusion, enter the amount from Worksheet 3, line 7. How can i file my 2010 taxes If you do  not qualify to exclude gain, enter -0- 13. How can i file my 2010 taxes 250,000   14. How can i file my 2010 taxes   Exclusion. How can i file my 2010 taxes Enter the smaller of line 12 or line 13 14. How can i file my 2010 taxes 129,010   15. How can i file my 2010 taxes   Taxable gain. How can i file my 2010 taxes Subtract line 14 from line 5. How can i file my 2010 taxes Report your taxable gain as described under Reporting the Sale . How can i file my 2010 taxes If the amount on line 6 is more than zero, complete line 16 15. How can i file my 2010 taxes 70,990   16. How can i file my 2010 taxes   Enter the smaller of line 6 or line 15. How can i file my 2010 taxes Enter this amount on line 12 of the Unrecaptured Section 1250 Gain  Worksheet in the instructions for Schedule D (Form 1040) 16. How can i file my 2010 taxes 10,000 Property Used Partly for Business or Rental If you use property partly as a home and partly for business or to produce rental income, the treatment of any gain on the sale depends partly on whether the business or rental part of the property is part of your home or separate from it. How can i file my 2010 taxes Part of Home Used for Business or Rental If the part of your property used for business or to produce rental income is within your home, such as a room used as a home office for a business, you do not need to allocate gain on the sale of the property between the business part of the property and the part used as a home. How can i file my 2010 taxes In addition, you do not need to report the sale of the business or rental part on Form 4797. How can i file my 2010 taxes This is true whether or not you were entitled to claim any depreciation. How can i file my 2010 taxes However, you cannot exclude the part of any gain equal to any depreciation allowed or allowable after May 6, 1997. How can i file my 2010 taxes See Depreciation after May 6, 1997, earlier. How can i file my 2010 taxes Example 1. How can i file my 2010 taxes Ray sold his main home in 2013 at a $30,000 gain. How can i file my 2010 taxes He has no gains or losses from the sale of property other than the gain from the sale of his home. How can i file my 2010 taxes He meets the ownership and use tests to exclude the gain from his income. How can i file my 2010 taxes However, he used part of the home as a business office in 2012 and claimed $500 depreciation. How can i file my 2010 taxes Because the business office was part of his home (not separate from it), he does not have to allocate the gain on the sale between the business part of the property and the part used as a home. How can i file my 2010 taxes In addition, he does not have to report any part of the gain on Form 4797. How can i file my 2010 taxes Because Ray was entitled to take a depreciation deduction, he must recognize $500 of the gain as unrecaptured section 1250 gain. How can i file my 2010 taxes He reports his gain, exclusion, and the taxable gain of $500 on Form 8949 and Schedule D (Form 1040). How can i file my 2010 taxes Example 2. How can i file my 2010 taxes The facts are the same as in Example 1 except that Ray was not entitled to claim depreciation for the business use of his home. How can i file my 2010 taxes Since Ray did not claim any depreciation, he can exclude the entire $30,000 gain. How can i file my 2010 taxes Separate Part of Property Used for Business or Rental You may have used part of your property as your home and a separate part of it for business or to produce rental income. How can i file my 2010 taxes Examples are: A working farm on which your house was located, A duplex in w