Main Home

DEFINITION of 'Main Home'

A term used by the Internal Revenue Service (IRS) to define the home a taxpayer has lived in most of the time during a given taxation year, or the only home a taxpayer owns. The classification of a taxpayer's main home is important when considering gains resulting from the sale of a main home.

BREAKING DOWN 'Main Home'

When you sell your home, you may be able to exclude the gains from your income for tax purposes if you pass the ownership and use tests. If over the previous five years you have owned the home for more than two years, and it was your main home for more than two years, then you can exclude up to $250,000 ($500,000 for joint filers) in a given tax year.

Losses resulting from the sale of your main home cannot be deducted.

RELATED TERMS
  1. IRS Publication 523

    A document published by the Internal Revenue Service (IRS) that ...
  2. Home Office

    An office located inside the taxpayer's home that serves as the ...
  3. Acquisition Debt

    A financial obligation incurred through the construction, improvement ...
  4. Office Audit

    An examination of a taxpayer's records by the Internal Revenue ...
  5. IRS Publication 1

    A document published by the Internal Revenue Service that identifies ...
  6. Form 3903

    A tax form distributed by the Internal Revenue Service (IRS) ...
Related Articles
  1. Wealth Management

    Buying a House Before Selling Your Own: Risks and Considerations

    Learn more about the financial risks and worst case scenarios associated with buying a home before selling your current residence.
  2. Home & Auto

    Homebuyers' Walkthrough: Reasons to Buy

    Homeownership is an option for many people who are ready to settle down and who are willing and able to meet the financial obligations of a mortgage. While it involves a commitment in terms of ...
  3. Home & Auto

    Keep Receipts for Home Improvements

    Just moved into a new home? Check out these 7 tips that every new homeowner should know
  4. Real Estate

    Economics of Owning a Vacation Home

    Discover the financial factors behind owning a second home and how weighing your options can determine if a vacation home is right for you.
  5. Home & Auto

    The Pros and Cons of Buying Vs. Building a Home

    Before you decide whether to buy or build a home, you should weigh the advantages and disadvantages of each scenario.
  6. Professionals

    Sale of Residence

    Sale of Residence
  7. What Would Moving Cost?

    If you’re faced with an expensive remodel, moving might seem cheaper, but you’d be surprised how expensive it can be to sell one home, buy another and move all your possessions. Moving ...
  8. Home & Auto

    5 Ways Overvaluing Your Home Can Hurt You

    Getting top dollar for your home is everyone's goal, but overvaluing your home can hurt its chances of being sold.
  9. Home & Auto

    How to Price Your Home Like the Pros

    Selling a house without using a realtor can be a difficult task. Thankfully the internet has made it easy to list a home like the pros do.
  10. Credit & Loans

    Is Now the Right Time to Buy a House?

    Thinking of buying a home? Consider these factors first.
RELATED FAQS
  1. Is it true that you can sell your home and not pay capital gains tax?

    It is true in most cases. When you sell your home, the capital gains on the sale are exempt from capital gains tax. Based ... Read Answer >>
  2. Can the IRS take your house?

    Understand why a person would have his home seized by the IRS and what he can do to avoid it. Learn about the seizure process ... Read Answer >>
  3. What are the differences between a home equity line of credit (HELOC) and a home ...

    Learn the differences between a home equity loan and a home equity line of credit, and find out how to select the one that ... Read Answer >>
  4. I sold my house. Can I exclude the gain from my income?

    Generally, you are required to include the gain from the sale of your home in your taxable income. However, if the gain is ... Read Answer >>
  5. How do I calculate how much home equity I have?

    Find out how to calculate the home equity in your home, your home equity percentage and the loan-to-value, or LTV, based ... Read Answer >>
  6. What unforeseen circumstances affect what I'll pay in capital gains taxes?

    The IRS has outlined some unique circumstances that could qualify you for a reduced capital gains tax exclusion. Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center