When to Report a Home Sale
You might not have to let Uncle Sam know that you sold your house.

If you sold your home last year, there's a good chance you don't have to tell the IRS about the deal -- even if you made a healthy profit.
The law makes the first $250,000 of profit on the sale of a home tax-free if you meet a couple of tests. The quarter-million-dollar limit is for single returns; it doubles to $500,000 if you're married and file a joint return with your husband or wife.
You qualify for tax-free profit on your home sale if:
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
- You owned and lived in the house for two of the five years leading up to the sale; and
- You did not sell another house -- and claim tax-free profit on the deal -- in the two years leading up to the time you sold this house.
And, if you have no taxable profit to report from the sale, the IRS doesn't want to hear about it. Now, if your profit breached the tax-free limits, you report the taxable profit on Schedule D.
There's more good news if you used part of the house for business purposes. Say you had a home office for which you deducted expenses or rented out a room. Until recently, homeowners in that situation couldn't count profit from the business part of the house as tax-free home-sale gain. Instead it was taxed as profit from commercial real estate. But a few years ago, the IRS decided to forget about that distinction. You no longer have to allocate profit between the home and business part of the house. (Although you don't have to treat a portion of the profit as taxable, the part of the profit attributable to depreciation deductions claimed for the business part of the house is still taxable.)
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

-
Rally Fades on Mixed AI Revolution News: Stock Market Today
All three main U.S. equity indexes opened higher but closed lower as a seven-session winning streak for the S&P 500 came to an end.
-
Stretch Your Holiday Shopping Budget Further with These Under-$50 Gifts That Don't Feel Cheap
Amazon October Prime Day is the perfect chance to nab some under-$50 gifts that feel more expensive than they are (because normally they would be).
-
New Tax Rules: Income the IRS Won’t Touch in 2025
Income Taxes From financial gifts to Roth withdrawal rules, here’s what income stays tax-free under the new Trump 2025 tax bill, and some information on what’s changed.
-
Three Popular Tax Breaks Are Gone for Good in 2026
Tax Breaks Here's a list of federal tax deductions and credits that you can't claim in the 2026 tax year. Plus, high-income earners could get hit by a 'surprise' tax bill.
-
Tax Brackets 2025 Quiz: How Much Do You Know?
Quiz Test your knowledge of IRS rules that impact how much money you keep in your wallet.
-
Retirees Face a Growing Capital Gains Tax Trap: What's Next?
Home Sales A changing housing market and unchanged IRS exclusion amounts can add up to a headache for many homeowners. Will Congress offer a fix?
-
New York Inflation Refund Checks Are Coming Soon: What to Know Now
Tax Relief Inflation relief checks are on the way for over 8 million New York taxpayers. Here's a full breakdown of who gets a payment and when you may expect yours.
-
IRS Phasing Out Paper Checks: What Happens After September 30?
Tax Changes Avoid delays when IRS tax refunds and Social Security paper checks are cut off. Here’s what to know.
-
The Most Tax-Friendly States for Investing in 2025 (Hint: There Are Two)
State Taxes Living in one of these places could lower your 2025 investment taxes — especially if you invest in real estate.
-
The Final Countdown for Retirees with Investment Income
Retirement Tax Don’t assume Social Security withholding is enough. Some retirement income may require a quarterly estimated tax payment by the September 15 deadline.