File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Hr Block Free Efile

1040 Tax Form For 20121040x Amended Tax Form2014 1040ezFiling Tax AmendmentIrs Form 1040ez 2014Free Amended ReturnFree File Fillable Forms2013 Tax Form 1040xWww Irs Gov Form1040x2005 Tax Return OnlineHow To File A 1040ez OnlineTaxact 2011 FreeBest Tax SoftwareIrs Instructions1040 Tax Form 2012File 1040x TurbotaxFiling State Taxes For FreeEarned Income Tax Credit CalculatorFree Online Federal And State Tax FilingH&r Block Free EfileH&r Block State TaxesHr Block Tax CutFile State Tax ReturnHow To Amend 2013 Tax ReturnTax Forms For Students1040a Tax TableAmended Utah State Tax Return2011taxesFiling Amended Tax Return 2010How To File Taxes When UnemployedUnemployment Tax ReturnFree 2010 Tax SoftwareFile Taxes Free Federal And StateEz Tax Form OnlineFile Form 1040x Online2012.taxhowNj 1040xTaxslayer WebsiteFree 2010 Tax FormsH&r Block State Tax Return

Hr Block Free Efile

Hr block free efile Index A Assistance (see Tax help) F Free tax services, How To Get Tax Help H Help (see Tax help) M More information (see Tax help) P Publications (see Tax help) T Tax help, How To Get Tax Help Taxpayer Advocate, Taxpayer Advocate Service. Hr block free efile TTY/TDD information, How To Get Tax Help Prev  Up     Home   More Online Publications
Print - Click this link to Print this page

IRS Clarifies Temporary ITIN Application Requirements for Noncitizens with Tax Extensions and Many Foreign Students

Effective Oct. 2, 2012, the IRS implemented two separate clarifying changes to its temporary procedures for issuing Individual Taxpayer Identification Numbers (ITINs).  

First, the IRS will allow individuals studying in the United States under the Student Exchange Visitors Program (SEVP) to get ITINs under a streamlined procedure. SEVP participants already provide documentation to the Department of Homeland Security under the requirements of that program, and will need a letter from their educational institution verifying their status.

Second, the IRS is creating special procedures for taxpayers who have an approved Tax Year 2011 extension to file their completed tax returns.

Under these temporary procedures, eligible taxpayers will be allowed to have their original documents certified by a Certifying Acceptance Agent (CAA) or a SEVP approved institution as appropriate rather than mailing originals to the IRS. Extension filers that choose to not submit originals documents or copies certified by the issuing agency, must apply through a CAA and individuals studying under the SEVP will be required to apply through a university, college or other SEVP-approved institution. For both groups, these temporary procedures cover applications for the primary applicant, their spouse and dependents.

Designed specifically for tax-administration purposes, ITINs are only issued to people who are not eligible to obtain a Social Security Number. ITINs assist the IRS with the collection of taxes from foreign nationals, nonresident aliens and others who have filing or payment obligations under U.S. law. The tightened interim guidelines, announced in June, remain in effect for most other noncitizens. More information about ITINs and these interim guidelines can be found at 2012 ITIN Review Frequently Asked Questions.

The temporary procedures apply to these two groups of taxpayers:

  1. Noncitizens that have filed extensions: These are noncitizens who requested an extension of time to file a 2011 federal income tax return for resident and nonresident aliens and choose to not submit originals documents or copies certified by the issuing agency. The ITINs issued under this procedure are temporary, expiring one year from the extended return due date (e.g., Oct. 15, 2013). The noncitizens must submit their W-7 and related identification documents through a CAA, along with Form W-7 and related attachments. See below for special instructions for CAAs. 
  2. SEVP Students: These are individuals admitted to the U.S. under an F, J or M visa who receive taxable scholarship, fellowship or other grants reportable by the school on Form W-2 or Form 1042-S. See below for special instructions for SEVP institutions, including a sample certification letter.

As previously announced, the IRS is in the process of conducting a review of its ITIN procedures.  Final rules will be issued before the start of the 2013 filing season. 

Related Information:

 

Page Last Reviewed or Updated: 18-Sep-2013

The Hr Block Free Efile

Hr block free efile 15. Hr block free efile   Selling Your Home Table of Contents Reminder Introduction Useful Items - You may want to see: Main Home Figuring Gain or LossSelling Price Amount Realized Adjusted Basis Amount of Gain or Loss Dispositions Other Than Sales Determining Basis Excluding the GainMaximum Exclusion Ownership and Use Tests Reduced Maximum Exclusion Business Use or Rental of Home Reporting the SaleSeller-financed mortgage. Hr block free efile More information. Hr block free efile Special SituationsException for sales to related persons. Hr block free efile Recapturing (Paying Back) a Federal Mortgage Subsidy Reminder Home sold with undeducted points. Hr block free efile  If you have not deducted all the points you paid to secure a mortgage on your old home, you may be able to deduct the remaining points in the year of the sale. Hr block free efile See Mortgage ending early under Points in chapter 23. Hr block free efile Introduction This chapter explains the tax rules that apply when you sell your main home. Hr block free efile In most cases, your main home is the one in which you live most of the time. Hr block free efile If you sold your main home in 2013, you may be able to exclude from income any gain up to a limit of $250,000 ($500,000 on a joint return in most cases). Hr block free efile See Excluding the Gain , later. Hr block free efile Generally, if you can exclude all the gain, you do not need to report the sale on your tax return. Hr block free efile If you have gain that cannot be excluded, it is taxable. Hr block free efile Report it on Form 8949, Sales and Other Dispositions of Capital Assets, and Schedule D (Form 1040). Hr block free efile You may also have to complete Form 4797, Sales of Business Property. Hr block free efile See Reporting the Sale , later. Hr block free efile If you have a loss on the sale, you generally cannot deduct it on your return. Hr block free efile However, you may need to report it. Hr block free efile See Reporting the Sale , later. Hr block free efile The following are main topics in this chapter. Hr block free efile Figuring gain or loss. Hr block free efile Basis. Hr block free efile Excluding the gain. Hr block free efile Ownership and use tests. Hr block free efile Reporting the sale. Hr block free efile Other topics include the following. Hr block free efile Business use or rental of home. Hr block free efile Recapturing a federal mortgage subsidy. Hr block free efile Useful Items - You may want to see: Publication 523 Selling Your Home 530 Tax Information for Homeowners 547 Casualties, Disasters, and Thefts Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 982 Reduction of Tax Attributes Due to Discharge of Indebtedness 8828 Recapture of Federal Mortgage Subsidy 8949 Sales and Other Dispositions of Capital Assets Main Home This section explains the term “main home. Hr block free efile ” 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. Hr block free efile To exclude gain under the rules of this chapter, 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. Hr block free efile Land. Hr block free efile   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. Hr block free efile However, if you sell vacant land used as part of your main home and that is adjacent to it, you may be able to exclude the gain from the sale under certain circumstances. Hr block free efile See Vacant land under Main Home in Publication 523 for more information. Hr block free efile Example. Hr block free efile You buy a piece of land and move your main home to it. Hr block free efile Then you sell the land on which your main home was located. Hr block free efile This sale is not considered a sale of your main home, and you cannot exclude any gain on the sale of the land. Hr block free efile More than one home. Hr block free efile   If you have more than one home, you can exclude gain only from the sale of your main home. Hr block free efile You must include in income gain from the sale of any other home. Hr block free efile If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time during the year. Hr block free efile Example 1. Hr block free efile You own two homes, one in New York and one in Florida. Hr block free efile 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. Hr block free efile In the absence of facts and circumstances indicating otherwise, the New York home is your main home. Hr block free efile You would be eligible to exclude the gain from the sale of the New York home but not of the Florida home in 2013. Hr block free efile Example 2. Hr block free efile You own a house, but you live in another house that you rent. Hr block free efile The rented house is your main home. Hr block free efile Example 3. Hr block free efile You own two homes, one in Virginia and one in New Hampshire. Hr block free efile In 2009 and 2010, you lived in the Virginia home. Hr block free efile In 2011 and 2012, you lived in the New Hampshire home. Hr block free efile In 2013, you lived again in the Virginia home. Hr block free efile Your main home in 2009, 2010, and 2013 is the Virginia home. Hr block free efile Your main home in 2011 and 2012 is the New Hampshire home. Hr block free efile You would be eligible to exclude gain from the sale of either home (but not both) in 2013. Hr block free efile Property used partly as your main home. Hr block free efile   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. Hr block free efile For details, see Business Use or Rental of Home , later. Hr block free efile 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. Hr block free efile Subtract the adjusted basis from the amount realized to get your gain or loss. Hr block free efile     Selling price     − Selling expenses       Amount realized       Amount realized     − Adjusted basis       Gain or loss   Selling Price The selling price is the total amount you receive for your home. Hr block free efile 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. Hr block free efile Payment by employer. Hr block free efile   You may have to sell your home because of a job transfer. Hr block free efile 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. Hr block free efile 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. Hr block free efile Option to buy. Hr block free efile   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. Hr block free efile If the option is not exercised, you must report the amount as ordinary income in the year the option expires. Hr block free efile Report this amount on Form 1040, line 21. Hr block free efile Form 1099-S. Hr block free efile   If you received Form 1099-S, Proceeds From Real Estate Transactions, box 2 (Gross proceeds) should show the total amount you received for your home. Hr block free efile   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. Hr block free efile Instead, box 4 will be checked to indicate your receipt or expected receipt of these items. Hr block free efile Amount Realized The amount realized is the selling price minus selling expenses. Hr block free efile Selling expenses. Hr block free efile   Selling expenses include: Commissions, Advertising fees, Legal fees, and Loan charges paid by the seller, such as loan placement fees or “points. Hr block free efile ” Adjusted Basis While you owned your home, you may have made adjustments (increases or decreases) to the basis. Hr block free efile This adjusted basis must be determined before you can figure gain or loss on the sale of your home. Hr block free efile For information on how to figure your home's adjusted basis, see Determining Basis , later. Hr block free efile Amount of Gain or Loss To figure the amount of gain or loss, compare the amount realized to the adjusted basis. Hr block free efile Gain on sale. Hr block free efile   If the amount realized is more than the adjusted basis, the difference is a gain and, except for any part you can exclude, in most cases is taxable. Hr block free efile Loss on sale. Hr block free efile   If the amount realized is less than the adjusted basis, the difference is a loss. Hr block free efile A loss on the sale of your main home cannot be deducted. Hr block free efile Jointly owned home. Hr block free efile   If you and your spouse sell your jointly owned home and file a joint return, you figure your gain or loss as one taxpayer. Hr block free efile Separate returns. Hr block free efile   If you file separate returns, each of you must figure your own gain or loss according to your ownership interest in the home. Hr block free efile Your ownership interest is generally determined by state law. Hr block free efile Joint owners not married. Hr block free efile   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. Hr block free efile Each of you applies the rules discussed in this chapter on an individual basis. Hr block free efile Dispositions Other Than Sales Some special rules apply to other dispositions of your main home. Hr block free efile Foreclosure or repossession. Hr block free efile   If your home was foreclosed on or repossessed, you have a disposition. Hr block free efile See Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments, to determine if you have ordinary income, gain, or loss. Hr block free efile Abandonment. Hr block free efile   If you abandon your home, see Publication 4681 to determine if you have ordinary income, gain, or loss. Hr block free efile Trading (exchanging) homes. Hr block free efile   If you trade your old home for another home, treat the trade as a sale and a purchase. Hr block free efile Example. Hr block free efile You owned and lived in a home with an adjusted basis of $41,000. Hr block free efile 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. Hr block free efile This is treated as a sale of your old home for $50,000 with a gain of $9,000 ($50,000 – $41,000). Hr block free efile 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). Hr block free efile Transfer to spouse. Hr block free efile   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. Hr block free efile This is true even if you receive cash or other consideration for the home. Hr block free efile As a result, the rules in this chapter do not apply. Hr block free efile More information. Hr block free efile   If you need more information, see Transfer to spouse in Publication 523 and Property Settlements in Publication 504, Divorced or Separated Individuals. Hr block free efile Involuntary conversion. Hr block free efile   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. Hr block free efile 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 . Hr block free efile Determining Basis You need to know your basis in your home to figure any gain or loss when you sell it. Hr block free efile Your basis in your home is determined by how you got the home. Hr block free efile Generally, your basis is its cost if you bought it or built it. Hr block free efile If you got it in some other way (inheritance, gift, etc. Hr block free efile ), your basis is generally either its fair market value when you received it or the adjusted basis of the previous owner. Hr block free efile While you owned your home, you may have made adjustments (increases or decreases) to your home's basis. Hr block free efile 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. Hr block free efile See Adjusted Basis , later. Hr block free efile You can find more information on basis and adjusted basis in chapter 13 of this publication and in Publication 523. Hr block free efile Cost As Basis The cost of property is the amount you paid for it in cash, debt obligations, other property, or services. Hr block free efile Purchase. Hr block free efile   If you bought your home, your basis is its cost to you. Hr block free efile This includes the purchase price and certain settlement or closing costs. Hr block free efile 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. Hr block free efile If you build, or contract to build, a new home, your purchase price can include costs of construction, as discussed in Publication 523. Hr block free efile Settlement fees or closing costs. Hr block free efile   When you bought your home, you may have paid settlement fees or closing costs in addition to the contract price of the property. Hr block free efile 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. Hr block free efile 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). Hr block free efile    Chapter 13 lists some of the settlement fees and closing costs that you can include in the basis of property, including your home. Hr block free efile It also lists some settlement costs that cannot be included in basis. Hr block free efile   Also see Publication 523 for additional items and a discussion of basis other than cost. Hr block free efile Adjusted Basis Adjusted basis is your cost or other basis increased or decreased by certain amounts. Hr block free efile To figure your adjusted basis, you can use Worksheet 1 in Publication 523. Hr block free efile Do not use Worksheet 1 if you acquired an interest in your home from a decedent who died in 2010 and whose executor filed Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent. Hr block free efile Increases to basis. Hr block free efile   These include the following. Hr block free efile Additions and other improvements that have a useful life of more than 1 year. Hr block free efile Special assessments for local improvements. Hr block free efile Amounts you spent after a casualty to restore damaged property. Hr block free efile Improvements. Hr block free efile   These add to the value of your home, prolong its useful life, or adapt it to new uses. Hr block free efile You add the cost of additions and other improvements to the basis of your property. Hr block free efile   For example, putting a recreation room or another bathroom in your unfinished basement, putting up a new fence, putting in new plumbing or wiring, putting on a new roof, or paving your unpaved driveway are improvements. Hr block free efile An addition to your house, such as a new deck, a sunroom, or a new garage, is also an improvement. Hr block free efile Repairs. Hr block free efile   These maintain your home in good condition but do not add to its value or prolong its life. Hr block free efile You do not add their cost to the basis of your property. Hr block free efile   Examples of repairs include repainting your house inside or outside, fixing your gutters or floors, repairing leaks or plastering, and replacing broken window panes. Hr block free efile Decreases to basis. Hr block free efile   These include the following. Hr block free efile Discharge of qualified principal residence indebtedness that was excluded from income. Hr block free efile Some or all of the cancellation of debt income that was excluded due to your bankruptcy or insolvency. Hr block free efile For details, see Publication 4681. Hr block free efile Gain you postponed from the sale of a previous home before May 7, 1997. Hr block free efile Deductible casualty losses. Hr block free efile Insurance payments you received or expect to receive for casualty losses. Hr block free efile Payments you received for granting an easement or right-of-way. Hr block free efile Depreciation allowed or allowable if you used your home for business or rental purposes. Hr block free efile Energy-related credits allowed for expenditures made on the residence. Hr block free efile (Reduce the increase in basis otherwise allowable for expenditures on the residence by the amount of credit allowed for those expenditures. Hr block free efile ) Adoption credit you claimed for improvements added to the basis of your home. Hr block free efile Nontaxable payments from an adoption assistance program of your employer you used for improvements you added to the basis of your home. Hr block free efile 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. Hr block free efile 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. Hr block free efile District of Columbia first-time homebuyer credit (allowed on the purchase of a principal residence in the District of Columbia beginning on August 5, 1997 and before January 1, 2012). Hr block free efile General sales taxes (allowed beginning 2004 and ending before 2014) 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. Hr block free efile Discharges of qualified principal residence indebtedness. Hr block free efile   You may be able to exclude from gross income a discharge of qualified principal residence indebtedness. Hr block free efile This exclusion applies to discharges made after 2006 and before 2014. Hr block free efile If you choose to exclude this income, you must reduce (but not below zero) the basis of the principal residence by the amount excluded from your gross income. Hr block free efile   File Form 982 with your tax return. Hr block free efile See the form's instructions for detailed information. Hr block free efile Recordkeeping. Hr block free efile You should keep records to prove your home's adjusted basis. Hr block free efile 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. Hr block free efile 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. Hr block free efile Keep records proving the basis of both homes as long as they are needed for tax purposes. Hr block free efile 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 report 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. Hr block free efile Excluding the Gain You may qualify to exclude from your income all or part of any gain from the sale of your main home. Hr block free efile 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. Hr block free efile To qualify, you must meet the ownership and use tests described later. Hr block free efile 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. Hr block free efile You can use Worksheet 2 in Publication 523 to figure the amount of your exclusion and your taxable gain, if any. Hr block free efile If you have any taxable gain from the sale of your home, you may have to increase your withholding or make estimated tax payments. Hr block free efile See Publication 505, Tax Withholding and Estimated Tax. Hr block free efile 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. Hr block free efile You meet the ownership test. Hr block free efile You meet the use test. Hr block free efile During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. Hr block free efile For details on gain allocated to periods of nonqualified use, see Periods of nonqualified use , later. Hr block free efile 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 . Hr block free efile Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. Hr block free efile 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). Hr block free efile Exception. Hr block free efile   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. Hr block free efile However, the maximum amount you may be able to exclude will be reduced. Hr block free efile See Reduced Maximum Exclusion , later. Hr block free efile Example 1—home owned and occupied for at least 2 years. Hr block free efile Mya bought and moved into her main home in September 2011. Hr block free efile She sold the home at a gain in October 2013. Hr block free efile 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. Hr block free efile She meets the ownership and use tests. Hr block free efile Example 2—ownership test met but use test not met. Hr block free efile Ayden bought a home, lived in it for 6 months, moved out, and never occupied the home again. Hr block free efile He later sold the home for a gain. Hr block free efile He owned the home during the entire 5-year period ending on the date of sale. Hr block free efile He meets the ownership test but not the use test. Hr block free efile He cannot exclude any part of his gain on the sale unless he qualified for a reduced maximum exclusion (explained later). Hr block free efile 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. Hr block free efile 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. Hr block free efile Temporary absence. Hr block free efile   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. Hr block free efile The following examples assume that the reduced maximum exclusion (discussed later) does not apply to the sales. Hr block free efile Example 1. Hr block free efile David Johnson, who is single, bought and moved into his home on February 1, 2011. Hr block free efile Each year during 2011 and 2012, David left his home for a 2-month summer vacation. Hr block free efile David sold the house on March 1, 2013. Hr block free efile Although the total time David used his home is less than 2 years (21 months), he meets the requirement and may exclude gain. Hr block free efile 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. Hr block free efile Example 2. Hr block free efile Professor Paul Beard, who is single, bought and moved into a house on August 18, 2010. Hr block free efile He lived in it as his main home continuously until January 5, 2012, when he went abroad for a 1-year sabbatical leave. Hr block free efile On February 6, 2013, 1 month after returning from the leave, Paul sold the house at a gain. Hr block free efile Because his leave was not a short temporary absence, he cannot include the period of leave to meet the 2-year use test. Hr block free efile He cannot exclude any part of his gain, because he did not use the residence for the required 2 years. Hr block free efile Ownership and use tests met at different times. Hr block free efile   You can meet the ownership and use tests during different 2-year periods. Hr block free efile However, you must meet both tests during the 5-year period ending on the date of the sale. Hr block free efile Example. Hr block free efile Beginning in 2002, Helen Jones lived in a rented apartment. Hr block free efile The apartment building was later converted to condominiums, and she bought her same apartment on December 3, 2010. Hr block free efile In 2011, Helen became ill and on April 14 of that year she moved to her daughter's home. Hr block free efile On July 12, 2013, while still living in her daughter's home, she sold her condominium. Hr block free efile 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. Hr block free efile She owned her condominium from December 3, 2010, to July 12, 2013 (more than 2 years). Hr block free efile She lived in the property from July 13, 2008 (the beginning of the 5-year period), to April 14, 2011 (more than 2 years). Hr block free efile 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. Hr block free efile Cooperative apartment. Hr block free efile   If you sold stock as a tenant-stockholder 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 entitles you to occupy as your main home for at least 2 years. Hr block free efile Exceptions to Ownership and Use Tests The following sections contain exceptions to the ownership and use tests for certain taxpayers. Hr block free efile Exception for individuals with a disability. Hr block free efile   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. Hr block free efile 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. Hr block free efile 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. Hr block free efile Previous home destroyed or condemned. Hr block free efile   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. Hr block free efile This rule applies if any part of the basis of the home you sold depended on the basis of the destroyed or condemned home. Hr block free efile 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. Hr block free efile Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps. Hr block free efile   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” as a member of the uniformed services or Foreign Service of the United States, or as an employee of the intelligence community. Hr block free efile 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" or as an enrolled volunteer or volunteer leader of the Peace Corps. Hr block free efile 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. Hr block free efile   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. Hr block free efile For more information about the suspension of the 5-year test period, see Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps in Publication 523. Hr block free efile 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. Hr block free efile (But see Special rules for joint returns , next. Hr block free efile ) Special rules for joint returns. Hr block free efile   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. Hr block free efile You are married and file a joint return for the year. Hr block free efile Either you or your spouse meets the ownership test. Hr block free efile Both you and your spouse meet the use test. Hr block free efile 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. Hr block free efile 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. Hr block free efile For this purpose, each spouse is treated as owning the property during the period that either spouse owned the property. Hr block free efile Example 1—one spouse sells a home. Hr block free efile Emily sells her home in June 2013 for a gain of $300,000. Hr block free efile She marries Jamie later in the year. Hr block free efile She meets the ownership and use tests, but Jamie does not. Hr block free efile Emily can exclude up to $250,000 of gain on a separate or joint return for 2013. Hr block free efile The $500,000 maximum exclusion for certain joint returns does not apply because Jamie does not meet the use test. Hr block free efile Example 2—each spouse sells a home. Hr block free efile 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. Hr block free efile He meets the ownership and use tests on his home, but Emily does not. Hr block free efile Emily can exclude $250,000 of gain and Jamie can exclude $200,000 of gain on the respective sales of their individual homes. Hr block free efile However, Emily cannot use Jamie's unused exclusion to exclude more than $250,000 of gain. Hr block free efile Therefore, Emily and Jamie must recognize $50,000 of gain on the sale of Emily's home. Hr block free efile 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. Hr block free efile Sale of main home by surviving spouse. Hr block free efile   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. Hr block free efile   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. Hr block free efile The sale or exchange took place after 2008. Hr block free efile The sale or exchange took place no more than 2 years after the date of death of your spouse. Hr block free efile You have not remarried. Hr block free efile You and your spouse met the use test at the time of your spouse's death. Hr block free efile You or your spouse met the ownership test at the time of your spouse's death. Hr block free efile Neither you nor your spouse excluded gain from the sale of another home during the last 2 years. Hr block free efile Example. Hr block free efile   Harry owned and used a house as his main home since 2009. Hr block free efile Harry and Wilma married on July 1, 2013, and from that date they use Harry's house as their main home. Hr block free efile Harry died on August 15, 2013, and Wilma inherited the property. Hr block free efile Wilma sold the property on September 3, 2013, at which time she had not remarried. Hr block free efile 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. Hr block free efile Home transferred from spouse. Hr block free efile   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. Hr block free efile Use of home after divorce. Hr block free efile   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. Hr block free efile 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. Hr block free efile 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. Hr block free efile In both cases, to qualify for a reduced exclusion, the sale of your main home must be due to one of the following reasons. Hr block free efile A change in place of employment. Hr block free efile Health. Hr block free efile Unforeseen circumstances. Hr block free efile Unforeseen circumstances. Hr block free efile   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 your main home. Hr block free efile   See Publication 523 for more information and to use Worksheet 3 to figure your reduced maximum exclusion. Hr block free efile 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. Hr block free efile But you must meet the ownership and use tests. Hr block free efile Periods of nonqualified use. Hr block free efile   In most cases, gain from the sale or exchange of your main home will not qualify for the exclusion to the extent that the gains are allocated to periods of nonqualified use. Hr block free efile Nonqualified use is any period after 2008 during which neither you nor your spouse (or your former spouse) used the property as a main home with the following exceptions. Hr block free efile Exceptions. Hr block free efile   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. Hr block free efile The gain resulting from the sale of the property is allocated between qualified and nonqualified use periods based on the amount of time the property was held for qualified and nonqualified use. Hr block free efile Gain from the sale or exchange of a main home allocable to periods of qualified use will continue to qualify for the exclusion for the sale of your main home. Hr block free efile Gain from the sale or exchange of property allocable to nonqualified use will not qualify for the exclusion. Hr block free efile Calculation. Hr block free efile   To figure the portion of the gain allocated to the period of nonqualified use, multiply the gain 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, in Publication 523. Hr block free efile Example 1. Hr block free efile On May 23, 2007, Amy, who is unmarried for all years in this example, bought a house. Hr block free efile 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. Hr block free efile The house was rented from June 1, 2009, to March 31, 2011. Hr block free efile Amy claimed depreciation deductions in 2009 through 2011 totaling $10,000. Hr block free efile 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. Hr block free efile 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. Hr block free efile Five Year Period Used as  Home Used as  Rental 1/31/08 – 5/31/09 16 months       6/1/09 – 3/31/11   22 months 4/1/11 – 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. Hr block free efile Amy divides 668 by 2,080 and obtains a decimal (rounded to at least three decimal places) of 0. Hr block free efile 321. Hr block free efile To figure her gain attributable to the period of nonqualified use, she multiplies $190,000 (the gain not attributable to the $10,000 depreciation deduction) by 0. Hr block free efile 321. Hr block free efile Because the gain attributable to periods of nonqualified use is $60,990, Amy can exclude $129,010 of her gain. Hr block free efile Example 2. Hr block free efile William owned and used a house as his main home from 2007 through 2010. Hr block free efile On January 1, 2011, he moved to another state. Hr block free efile He rented his house from that date until April 30, 2013, when he sold it. Hr block free efile 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. Hr block free efile He must report the sale on Form 4797 because it was rental property at the time of sale. Hr block free efile 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. Hr block free efile Because he met the ownership and use tests, he can exclude gain up to $250,000. Hr block free efile 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. Hr block free efile Depreciation after May 6, 1997. Hr block free efile   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. Hr block free efile 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. Hr block free efile See Publication 544 for more information. Hr block free efile Property used partly for business or rental. Hr block free efile   If you used property partly as a home and partly for business or to produce rental income, see Publication 523. Hr block free efile Reporting the Sale Do not report the 2013 sale of your main home on your tax return unless: You have a gain and do not qualify to exclude all of it, You have a gain and choose not to exclude it, or You received Form 1099-S. Hr block free efile If any of these conditions apply, report the entire gain or loss. Hr block free efile For details on how to report the gain or loss, see the Instructions for Schedule D (Form 1040) and the Instructions for Form 8949. Hr block free efile If you used the home for business or to produce rental income, you may have to use Form 4797 to report the sale of the business or rental part (or the sale of the entire property if used entirely for business or rental). Hr block free efile See Business Use or Rental of Home in Publication 523 and the Instructions for Form 4797. Hr block free efile Installment sale. Hr block free efile    Some sales are made under arrangements that provide for part or all of the selling price to be paid in a later year. Hr block free efile These sales are called “installment sales. Hr block free efile ” If you finance the buyer's purchase of your home yourself instead of having the buyer get a loan or mortgage from a bank, you probably have an installment sale. Hr block free efile You may be able to report the part of the gain you cannot exclude on the installment basis. Hr block free efile    Use Form 6252, Installment Sale Income, to report the sale. Hr block free efile Enter your exclusion on line 15 of Form 6252. Hr block free efile Seller-financed mortgage. Hr block free efile   If you sell your home and hold a note, mortgage, or other financial agreement, the payments you receive in most cases consist of both interest and principal. Hr block free efile You must separately report as interest income the interest you receive as part of each payment. Hr block free efile If the buyer of your home uses the property as a main or second home, you must also report the name, address, and social security number (SSN) of the buyer on line 1 of Schedule B (Form 1040A or 1040). Hr block free efile The buyer must give you his or her SSN, and you must give the buyer your SSN. Hr block free efile Failure to meet these requirements may result in a $50 penalty for each failure. Hr block free efile If either you or the buyer does not have and is not eligible to get an SSN, see Social Security Number in chapter 1. Hr block free efile More information. Hr block free efile   For more information on installment sales, see Publication 537, Installment Sales. Hr block free efile Special Situations The situations that follow may affect your exclusion. Hr block free efile Sale of home acquired in a like-kind exchange. Hr block free efile   You cannot claim the exclusion if: You acquired your home in a like-kind exchange (also known as a section 1031 exchange), or your basis in your home is determined by reference to the basis of the home in the hands of the person who acquired the property in a like-kind exchange (for example, you received the home from that person as a gift), and You sold the home during the 5-year period beginning with the date your home was acquired in the like-kind exchange. Hr block free efile Gain from a like-kind exchange is not taxable at the time of the exchange. Hr block free efile This means that gain will not be taxed until you sell or otherwise dispose of the property you receive. Hr block free efile To defer gain from a like-kind exchange, you must have exchanged business or investment property for business or investment property of a like kind. Hr block free efile For more information about like-kind exchanges, see Publication 544, Sales and Other Dispositions of Assets. Hr block free efile Home relinquished in a like-kind exchange. Hr block free efile   If you use your main home partly for business or rental purposes and then exchange the home for another property, see Publication 523. Hr block free efile Expatriates. Hr block free efile   You cannot claim the exclusion if the expatriation tax applies to you. Hr block free efile The expatriation tax applies to certain U. Hr block free efile S. Hr block free efile citizens who have renounced their citizenship (and to certain long-term residents who have ended their residency). Hr block free efile For more information about the expatriation tax, see Expatriation Tax in chapter 4 of Publication 519, U. Hr block free efile S. Hr block free efile Tax Guide for Aliens. Hr block free efile Home destroyed or condemned. Hr block free efile   If your home was destroyed or condemned, any gain (for example, because of insurance proceeds you received) qualifies for the exclusion. Hr block free efile   Any part of the gain that cannot be excluded (because it is more than the maximum exclusion) can be postponed under the rules explained in: Publication 547, in the case of a home that was destroyed, or Publication 544, chapter 1, in the case of a home that was condemned. Hr block free efile Sale of remainder interest. Hr block free efile   Subject to the other rules in this chapter, you can choose to exclude gain from the sale of a remainder interest in your home. Hr block free efile If you make this choice, you cannot choose to exclude gain from your sale of any other interest in the home that you sell separately. Hr block free efile Exception for sales to related persons. Hr block free efile   You cannot exclude gain from the sale of a remainder interest in your home to a related person. Hr block free efile Related persons include your brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. Hr block free efile ), and lineal descendants (children, grandchildren, etc. Hr block free efile ). Hr block free efile Related persons also include certain corporations, partnerships, trusts, and exempt organizations. Hr block free efile Recapturing (Paying Back) a Federal Mortgage Subsidy If you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. Hr block free efile You recapture the benefit by increasing your federal income tax for the year of the sale. Hr block free efile You may have to pay this recapture tax even if you can exclude your gain from income under the rules discussed earlier; that exclusion does not affect the recapture tax. Hr block free efile Loans subject to recapture rules. Hr block free efile   The recapture applies to loans that: Came from the proceeds of qualified mortgage bonds, or Were based on mortgage credit certificates. Hr block free efile The recapture also applies to assumptions of these loans. Hr block free efile When recapture applies. Hr block free efile   Recapture of the federal mortgage subsidy applies only if you meet both of the following conditions. Hr block free efile You sell or otherwise dispose of your home at a gain within the first 9 years after the date you close your mortgage loan. Hr block free efile Your income for the year of disposition is more than that year's adjusted qualifying income for your family size for that year (related to the income requirements a person must meet to qualify for the federally subsidized program). Hr block free efile When recapture does not apply. Hr block free efile   Recapture does not apply in any of the following situations. Hr block free efile Your mortgage loan was a qualified home improvement loan (QHIL) of not more than $15,000 used for alterations, repairs, and improvements that protect or improve the basic livability or energy efficiency of your home. Hr block free efile Your mortgage loan was a QHIL of not more than $150,000 in the case of a QHIL used to repair damage from Hurricane Katrina to homes in the hurricane disaster area; a QHIL funded by a qualified mortgage bond that is a qualified Gulf Opportunity Zone Bond; or a QHIL for an owner-occupied home in the Gulf Opportunity Zone (GO Zone), Rita GO Zone, or Wilma GO Zone. Hr block free efile For more information, see Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma. Hr block free efile Also see Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas. Hr block free efile The home is disposed of as a result of your death. Hr block free efile You dispose of the home more than 9 years after the date you closed your mortgage loan. Hr block free efile You transfer the home to your spouse, or to your former spouse incident to a divorce, where no gain is included in your income. Hr block free efile You dispose of the home at a loss. Hr block free efile Your home is destroyed by a casualty, and you replace it on its original site within 2 years after the end of the tax year when the destruction happened. Hr block free efile The replacement period is extended for main homes destroyed in a federally declared disaster area, a Midwestern disaster area, the Kansas disaster area, and the Hurricane Katrina disaster area. Hr block free efile For more information, see Replacement Period in Publication 547. Hr block free efile You refinance your mortgage loan (unless you later meet the conditions listed previously under When recapture applies ). Hr block free efile Notice of amounts. Hr block free efile   At or near the time of settlement of your mortgage loan, you should receive a notice that provides the federally subsidized amount and other information you will need to figure your recapture tax. Hr block free efile How to figure and report the recapture. Hr block free efile    The recapture tax is figured on Form 8828. Hr block free efile If you sell your home and your mortgage is subject to recapture rules, you must file Form 8828 even if you do not owe a recapture tax. Hr block free efile Attach Form 8828 to your Form 1040. Hr block free efile For more information, see Form 8828 and its instructions. Hr block free efile Prev  Up  Next   Home   More Online Publications