I sold my house. Can I exclude the gain from my income?

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Whether or not you are exempt from tax will depend on your filing status, the amount of the gain, and your occupancy status for the property sold.

Under Internal Revenue Code Section 121, you only pay taxes when your gain is more than $250,000 above your 'basis' if you are a single filer, or $500,000 if you are filing jointly.

Your gain is figured by determining your basis. Your basis consists of what you originally paid for the property plus certain closing costs at the time. Then you add in major home improvements (i.e. new kitchen, adding a room, etc.). Then you add in whatever real estate transaction fees you incurred.

To figure out the gain, take your sale price less this 'basis'. If the difference is less than $250,000 (single filier) or $500,000 (filing jointly), then you will have no tax on any of your gain.

You will need to file a form with your taxes to document this.

To best determine whether or not your property sale is exempt, you may want to speak with a qualified tax planner. You can also review the relevant IRS publication: https://www.irs.gov/publications/p523/ar02.html

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