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.
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.

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