Submitted By: someone
Answered: January 15, 2018 12:25 am

Our usual income is below $20,000 annually, but we sold our home in 2017. Is the $300,000 gain taxable?

It depends on whether you qualify for the home sale exclusion. This exclusion lets you omit from gross income up to $250,000 of gain ($500,000 on a joint return), but only if you meet certain conditions:

  • You must have owned and use the home as your principal residence for a period aggregating two of the five years preceding the date of sale. You are permitted to meet these two separate tests (ownership and use) using different two-year periods. The five-year period can be suspended for certain government employees (e.g., those in uniform, foreign service, or intelligence).
  • You didn’t claim a home sale exclusion for a sale that was within two years preceding the date of your current sale.
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Tax Glossary

Modified adjusted gross income (MAGI)

This is generally adjusted gross income increased by certain items such as tax-free foreign earned income. MAGI usually is used to determine phaseouts of certain deductions and credits.

More terms