Personal Residence Transactions
Sale of a Principal Residence
Special tax rules apply to the sale of a taxpayer's principal residence. Subject to statutory ownership and use requirements, qualifying taxpayers may exclude a portion of the gain from taxable income.
- Principal residence requirements.
- Ownership test.
- Use test.
- Maximum gain exclusion subject to statutory limits.
Tip
Focus on understanding the ownership and use requirements rather than memorizing specific exclusion amounts.
Summary
The principal residence exclusion is one of the most significant tax benefits available to individual homeowners.