Key rules
– Exclusion: Up to $250k (single) / $500k (MFJ) of gain
– 2-of-5 test: Own and use as main home for 2 of the last 5 years
– Frequency: Generally once every 2 years
– Depreciation recapture: Prior rental/home-office depreciation is taxable
– State note: Florida has no state income tax; other states may.
Quick gain framework
Sale price
– Selling costs (commission, title, certain fees)
– Adjusted basis = purchase price + capital improvements – depreciation
= Gain → apply exclusion; remainder is capital gain.
Keep these
Closing disclosures, improvement receipts/permits, proof of occupancy, schedules for any rental/home office.
Wave Tax
Eligibility review, basis reconstruction, pre-sale tax estimate, and closing coordination.
Book a Home Sale Tax Preview with Wave Tax.
Educational only; not tax advice.