This chapter explains the tax rules that apply when you sell your main home. Generally, your main home is the one in which you live most of the time.

Gain.
If you have a gain from the sale of your main home, you may be able to exclude from income up to a limit of $250,000 ($500,000 on a joint return in most cases).

Loss.
You cannot deduct a loss from the sale of your main home.

Worksheets.
Publication 523, Selling Your Home, includes worksheets to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the amount of the gain that you can exclude.

Reporting the sale.
Do not report the sale of your main home on your tax return unless you have a gain and at least part of it is taxable. Report any taxable gain on Schedule D (Form 1040).

Who may need to read chapter 3 in Publication 523. Chapter 3 of Publication 523 explains the rules that applied to sales before May 7, 1997. Those rules may still apply to you if you are in either of the following situations.

1. You sold your main home at a gain before May 7, 1997, and either:
   1. Bought a new home in 1999 within the replacement period, or
   2. Did not buy a new home before your replacement period ended in 1999.
2. You sold your main home at a gain in 1999, and made the choice to use the rules that applied to sales of a main home before May 7, 1997.

If you are in either of these situations and have questions, see Publication 523.

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