Publication 523 - Introductory Material

Key Points

This publication explains the tax rules that apply when you sell (or otherwise give up ownership of) a home. It also shows you how to do the calculations you'll need to do.

If you sell your home at a significant profit (gain), some or all of that gain could be taxable. However, in most cases, if the home you sold counts as your main home, the first $250,000 of gain is not taxable—$500,000 if you are married and filing jointly.

If you sell your home at a loss, the money you receive is not taxable. However, you cannot deduct the loss from other income.

This publication will show you how to determine if you have a gain or loss, how much of that gain is taxable (if any), and how to report your transaction correctly.

Staying Current

To be sure you have the most up-to-date information related to Publication 523, such as legislation enacted after it was published, go to

Related IRS Materials

You may find the following publications, forms, and instructions helpful when you are working through this publication.

Useful Items - You may want to see:


  • 504 Divorced or Separated Individuals

  • 505 Tax Withholding and Estimated Tax

  • 527 Residential Rental Property

  • 530 Tax Information for Homeowners

  • 537 Installment Sales

  • 544 Sales and Other Dispositions of Assets

  • 547 Casualties, Disasters, and Thefts

  • 551 Basis of Assets

  • 587 Business Use of Your Home

  • 936 Home Mortgage Interest Deduction

  • 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments

Form (and Instructions)

  • Schedule A (Form 1040) Itemized Deductions

  • Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends

  • Schedule D (Form 1040) Capital Gains and Losses

  • 982 Reduction of Tax Attributes Due to Discharge of Indebtedness

  • 1040 U.S. Individual Income Tax Return

  • 1099-S Proceeds From Real Estate Transactions

  • 4797 Sales of Business Property

  • 5405 Repayment of the First-Time Homebuyer Credit

  • 6252 Installment Sale Income

  • 8822 Change of Address

  • 8828 Recapture of Federal Mortgage Subsidy

  • 8949 Sales and Other Dispositions of Capital Assets

  • W-2 Wage and Tax Statement

  • W-7 Application for IRS Individual Taxpayer Identification Number

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