If you sold or are considering selling your home, there are a few things you’ll need to know about how the sale affects your tax return.
Tax Implications of Selling a House
Before selling your home
If you are getting ready to sell your home, you’ll need to calculate the cost basis of your property for tax purposes. To determine your cost basis, if you saved Form HUD-1 (replaced with the Closing Disclosure form in 2015) from when you bought the house, add attorney fees, survey costs, agents’ commissions, title search costs, recording fees, and the transfer and stamp taxes you paid, to the price of the property. You should also add the cost of improvements to the property. This will help you determine your adjusted basis in the property once you finalize selling your home. You can also add in the various costs related to the sale of your home.
If you’re getting ready to sell your home, you’ll need to calculate the basis of your property. You can add various costs related to the sale of your home you paid when you bought or sold the property.
After you sell
If you sold your main home this year and you owned and lived in it for a total of two of the last five years, your profit from the sale may be tax-exempt. If you are single, up to $250,000 of profit may be tax-free; if you’re married, that number jumps to $500,000. You don’t have to own the home and live in the home for the same time two-year frame during the five-year period.
If you didn’t own or live in the home for two of the last five years, you may still be able to use a prorated exclusion amount in certain cases (e.g., if you move for work). The excludable amount is modified when a portion of the home is used for business purposes.
Related articles

Tax Deductions and Benefits of Buying a New House
Buying a home can offer some major tax benefits – see how you can take advantage of them as a new homeowner.

Tax Deductions and Benefits of Owning a Home
What are the many tax benefits of owning a home? Find out how owning real estate might be able to ease your tax burden.

Do You Own a Rental Property?
Owning a rental property has many tax implications. Here’s what qualifies as rental income, along with a list of deductions you can take.

Why Jackson Hewitt®?
Our Tax Pros will connect with you one-on-one, answer all your questions, and always go the extra mile to support you.
We have flexible hours, locations, and filing options that cater to every hardworking tax filer.
We won't stop until you get every dollar you deserve, guaranteed. It's what we've been doing for over 35 years.