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If I Am Unemployed Do I File Taxes

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If I Am Unemployed Do I File Taxes

If i am unemployed do i file taxes Publication 17 - Introductory Material Table of Contents What's New Reminders IntroductionIcons. If i am unemployed do i file taxes Ordering forms and publications. If i am unemployed do i file taxes Tax questions. If i am unemployed do i file taxes All material in this publication may be reprinted freely. If i am unemployed do i file taxes A citation to Your Federal Income Tax (2013) would be appropriate. If i am unemployed do i file taxes The explanations and examples in this publication reflect the interpretation by the Internal Revenue Service (IRS) of: Tax laws enacted by Congress, Treasury regulations, and Court decisions. If i am unemployed do i file taxes However, the information given does not cover every situation and is not intended to replace the law or change its meaning. If i am unemployed do i file taxes This publication covers some subjects on which a court may have made a decision more favorable to taxpayers than the interpretation by the IRS. If i am unemployed do i file taxes Until these differing interpretations are resolved by higher court decisions or in some other way, this publication will continue to present the interpretations by the IRS. If i am unemployed do i file taxes All taxpayers have important rights when working with the IRS. If i am unemployed do i file taxes These rights are described in Your Rights as a Taxpayer in the back of this publication. If i am unemployed do i file taxes What's New This section summarizes important tax changes that took effect in 2013. If i am unemployed do i file taxes Most of these changes are discussed in more detail throughout this publication. If i am unemployed do i file taxes Future developments. If i am unemployed do i file taxes  For the latest information about the tax law topics covered in this publication, including information about any tax legislation, go to www. If i am unemployed do i file taxes irs. If i am unemployed do i file taxes gov/pub17. If i am unemployed do i file taxes Additional Medicare Tax. If i am unemployed do i file taxes  Beginning in 2013, a 0. If i am unemployed do i file taxes 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 for any other filing status. If i am unemployed do i file taxes See Form 8959 and its instructions. If i am unemployed do i file taxes Net Investment Income Tax. If i am unemployed do i file taxes  Beginning in 2013, you may be subject to Net Investment Income Tax (NIIT). If i am unemployed do i file taxes The NIIT is 3. If i am unemployed do i file taxes 8% of the smaller of (a) your net investment income or (b) the excess of your modified adjusted gross income over: $125,000 if married filing separately, $250,000 if married filing jointly or qualifying widow(er), or $200,000 if any other filing status. If i am unemployed do i file taxes See Form 8960 and its instructions. If i am unemployed do i file taxes Change in tax rates. If i am unemployed do i file taxes  The highest tax rate is 39. If i am unemployed do i file taxes 6%. If i am unemployed do i file taxes For more information, see the 2013 Tax Computation Worksheet or the 2013 Tax Rate Schedules near the end of this publication. If i am unemployed do i file taxes Tax rate on net capital gain and qualified dividends. If i am unemployed do i file taxes  The maximum tax rate of 15% on net capital gain and qualified dividends has increased to 20% for some taxpayers. If i am unemployed do i file taxes See chapter 16. If i am unemployed do i file taxes Medical and dental expenses. If i am unemployed do i file taxes  You can deduct only the part of your medical and dental expenses that is more than 10% of your adjusted gross income (7. If i am unemployed do i file taxes 5% if either you or your spouse is age 65 or older). If i am unemployed do i file taxes See chapter 21. If i am unemployed do i file taxes Personal exemption amount increased for certain taxpayers. If i am unemployed do i file taxes  Your personal exemption is increased to $3,900. If i am unemployed do i file taxes But the amount is reduced if your adjusted gross income is more than: $150,000 if married filing separately, $250,000 if single, $275,000 if head of household, or $300,000 if any other filing status. If i am unemployed do i file taxes See chapter 3. If i am unemployed do i file taxes Limit on itemized deductions. If i am unemployed do i file taxes  You may not be able to deduct all of your itemized deductions if your adjusted gross income is more than: $150,000 if married filing separately, $250,000 if single, $275,000 if head of household, or $300,000 if any other filing status. If i am unemployed do i file taxes See chapter 29. If i am unemployed do i file taxes Same-sex marriages. If i am unemployed do i file taxes  If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. If i am unemployed do i file taxes See chapter 2. If i am unemployed do i file taxes If you meet certain requirements, you may be able to file amended returns to change your filing status for some earlier years. If i am unemployed do i file taxes For details on filing amended returns, see chapter 1. If i am unemployed do i file taxes Health flexible spending arrangements (FSAs). If i am unemployed do i file taxes  You cannot have more than $2,500 in salary reduction contributions made to a health FSA for plan years beginning after 2012. If i am unemployed do i file taxes See chapter 5. If i am unemployed do i file taxes Expiring credits. If i am unemployed do i file taxes  The plug-in electric vehicle credit and the refundable part of the credit for prior year minimum tax have expired. If i am unemployed do i file taxes You cannot claim either one on your 2013 return. If i am unemployed do i file taxes See chapter 37. If i am unemployed do i file taxes Ponzi-type investment schemes. If i am unemployed do i file taxes  There are new rules for how to claim a theft loss deduction on Form 4684 due to a Ponzi-type investment scheme. If i am unemployed do i file taxes See chapter 25. If i am unemployed do i file taxes Home office deduction simplified method. If i am unemployed do i file taxes  If you can take a home office deduction, you may be able to use a simplified method to figure it. If i am unemployed do i file taxes See Publication 587. If i am unemployed do i file taxes Standard mileage rates. If i am unemployed do i file taxes  The 2013 rate for business use of your car is increased to 56½ cents a mile. If i am unemployed do i file taxes See chapter 26. If i am unemployed do i file taxes The 2013 rate for use of your car to get medical care is increased to 24 cents a mile. If i am unemployed do i file taxes See chapter 21. If i am unemployed do i file taxes The 2013 rate for use of your car to move is increased to 24 cents a mile. If i am unemployed do i file taxes See Publication 521, Moving Expenses. If i am unemployed do i file taxes Reminders Listed below are important reminders and other items that may help you file your 2013 tax return. If i am unemployed do i file taxes Many of these items are explained in more detail later in this publication. If i am unemployed do i file taxes Enter your social security number (SSN). If i am unemployed do i file taxes  Enter your SSN in the space provided on your tax form. If i am unemployed do i file taxes If you filed a joint return for 2012 and are filing a joint return for 2013 with the same spouse, enter your names and SSNs in the same order as on your 2012 return. If i am unemployed do i file taxes See chapter 1. If i am unemployed do i file taxes Secure your tax records from identity theft. If i am unemployed do i file taxes  Identity theft occurs when someone uses your personal information, such as your name, SSN, or other identifying information, without your permission, to commit fraud or other crimes. If i am unemployed do i file taxes An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund. If i am unemployed do i file taxes For more information about identity theft and how to reduce your risk from it, see chapter 1. If i am unemployed do i file taxes Taxpayer identification numbers. If i am unemployed do i file taxes  You must provide the taxpayer identification number for each person for whom you claim certain tax benefits. If i am unemployed do i file taxes This applies even if the person was born in 2013. If i am unemployed do i file taxes Generally, this number is the person's social security number (SSN). If i am unemployed do i file taxes See chapter 1. If i am unemployed do i file taxes Foreign source income. If i am unemployed do i file taxes  If you are a U. If i am unemployed do i file taxes S. If i am unemployed do i file taxes citizen with income from sources outside the United States (foreign income), you must report all such income on your tax return unless it is exempt by U. If i am unemployed do i file taxes S. If i am unemployed do i file taxes law. If i am unemployed do i file taxes This is true whether you live inside or outside the United States and whether or not you receive a Form W-2 or Form 1099 from the foreign payer. If i am unemployed do i file taxes This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents and royalties). If i am unemployed do i file taxes If you live outside the United States, you may be able to exclude part or all of your foreign source earned income. If i am unemployed do i file taxes For details, see Publication 54, Tax Guide for U. If i am unemployed do i file taxes S. If i am unemployed do i file taxes Citizens and Resident Aliens Abroad. If i am unemployed do i file taxes Foreign financial assets. If i am unemployed do i file taxes  If you had foreign financial assets in 2013, you may have to file Form 8938 with your return. If i am unemployed do i file taxes Check www. If i am unemployed do i file taxes IRS. If i am unemployed do i file taxes gov/form8938 for details. If i am unemployed do i file taxes Automatic 6-month extension to file tax return. If i am unemployed do i file taxes  You can use Form 4868, Application for Automatic Extension of Time To File U. If i am unemployed do i file taxes S. If i am unemployed do i file taxes Individual Income Tax Return, to obtain an automatic 6-month extension of time to file your tax return. If i am unemployed do i file taxes See chapter 1. If i am unemployed do i file taxes Include your phone number on your return. If i am unemployed do i file taxes  To promptly resolve any questions we have in processing your tax return, we would like to be able to call you. If i am unemployed do i file taxes Please enter your daytime telephone number on your tax form next to your signature and occupation. If i am unemployed do i file taxes If you are filing a joint return, you can enter either your or your spouse's daytime phone number. If i am unemployed do i file taxes Payment of taxes. If i am unemployed do i file taxes   You can pay your taxes online, by phone, or by check or money order. If i am unemployed do i file taxes You can make a direct transfer from your bank account or use a credit or debit card. If i am unemployed do i file taxes If you e-file, you can schedule an electronic payment. If i am unemployed do i file taxes See chapter 1. If i am unemployed do i file taxes Faster ways to file your return. If i am unemployed do i file taxes  The IRS offers fast, accurate ways to file your tax return information without filing a paper tax return. If i am unemployed do i file taxes You can use IRS e-file (electronic filing). If i am unemployed do i file taxes See chapter 1. If i am unemployed do i file taxes Free electronic filing. If i am unemployed do i file taxes  You may be able to file your 2013 taxes online for free. If i am unemployed do i file taxes See chapter 1. If i am unemployed do i file taxes Change of address. If i am unemployed do i file taxes  If you change your address, you should notify the IRS. If i am unemployed do i file taxes See Change of Address in chapter 1. If i am unemployed do i file taxes Refund on a late filed return. If i am unemployed do i file taxes  If you were due a refund but you did not file a return, you generally must file your return within 3 years from the date the return was due (including extensions) to get that refund. If i am unemployed do i file taxes See chapter 1. If i am unemployed do i file taxes Frivolous tax returns. If i am unemployed do i file taxes  The IRS has published a list of positions that are identified as frivolous. If i am unemployed do i file taxes The penalty for filing a frivolous tax return is $5,000. If i am unemployed do i file taxes See chapter 1. If i am unemployed do i file taxes Filing erroneous claim for refund or credit. If i am unemployed do i file taxes  You may have to pay a penalty if you file an erroneous claim for refund or credit. If i am unemployed do i file taxes See chapter 1. If i am unemployed do i file taxes Privacy Act and paperwork reduction information. If i am unemployed do i file taxes   The IRS Restructuring and Reform Act of 1998, the Privacy Act of 1974, and the Paperwork Reduction Act of 1980 require that when we ask you for information we must first tell you what our legal right is to ask for the information, why we are asking for it, how it will be used, what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory under the law. If i am unemployed do i file taxes A complete statement on this subject can be found in your tax form instructions. If i am unemployed do i file taxes Customer service for taxpayers. If i am unemployed do i file taxes  You can set up a personal appointment at the most convenient Taxpayer Assistance Center, on the most convenient business day. If i am unemployed do i file taxes See How To Get Tax Help in the back of this publication. If i am unemployed do i file taxes Preparer e-file mandate. If i am unemployed do i file taxes  Most paid preparers must e-file returns they prepare and file. If i am unemployed do i file taxes Your preparer may make you aware of this requirement and the options available to you. If i am unemployed do i file taxes Treasury Inspector General for Tax Administration. If i am unemployed do i file taxes   If you want to confidentially report misconduct, waste, fraud, or abuse by an IRS employee, you can call 1-800-366-4484 (call 1-800-877-8339 if you are deaf, hard of hearing, or have a speech disability, and are using TTY/TDD equipment). If i am unemployed do i file taxes You can remain anonymous. If i am unemployed do i file taxes Photographs of missing children. If i am unemployed do i file taxes  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. If i am unemployed do i file taxes Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. If i am unemployed do i file taxes You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. If i am unemployed do i file taxes Introduction This publication covers the general rules for filing a federal income tax return. If i am unemployed do i file taxes It supplements the information contained in your tax form instructions. If i am unemployed do i file taxes It explains the tax law to make sure you pay only the tax you owe and no more. If i am unemployed do i file taxes How this publication is arranged. If i am unemployed do i file taxes   This publication closely follows Form 1040, U. If i am unemployed do i file taxes S. If i am unemployed do i file taxes Individual Income Tax Return. If i am unemployed do i file taxes It is divided into six parts which cover different sections of Form 1040. If i am unemployed do i file taxes Each part is further divided into chapters which generally discuss one line of the form. If i am unemployed do i file taxes Do not worry if you file Form 1040A or Form 1040EZ. If i am unemployed do i file taxes Anything included on a line of either of these forms is also included on Form 1040. If i am unemployed do i file taxes   The table of contents inside the front cover and the index in the back of the publication are useful tools to help you find the information you need. If i am unemployed do i file taxes What is in this publication. If i am unemployed do i file taxes   The publication begins with the rules for filing a tax return. If i am unemployed do i file taxes It explains: Who must file a return, Which tax form to use, When the return is due, How to e-file your return, and Other general information. If i am unemployed do i file taxes It will help you identify which filing status you qualify for, whether you can claim any dependents, and whether the income you receive is taxable. If i am unemployed do i file taxes The publication goes on to explain the standard deduction, the kinds of expenses you may be able to deduct, and the various kinds of credits you may be able to take to reduce your tax. If i am unemployed do i file taxes   Throughout the publication are examples showing how the tax law applies in typical situations. If i am unemployed do i file taxes Also throughout the publication are flowcharts and tables that present tax information in an easy-to-understand manner. If i am unemployed do i file taxes   Many of the subjects discussed in this publication are discussed in greater detail in other IRS publications. If i am unemployed do i file taxes References to those other publications are provided for your information. If i am unemployed do i file taxes Icons. If i am unemployed do i file taxes   Small graphic symbols, or icons, are used to draw your attention to special information. If i am unemployed do i file taxes See Table 1 later for an explanation of each icon used in this publication. If i am unemployed do i file taxes What is not covered in this publication. If i am unemployed do i file taxes   Some material that you may find helpful is not included in this publication but can be found in your tax form instruction booklet. If i am unemployed do i file taxes This includes lists of: Where to report certain items shown on information documents, and Recorded tax information topics (TeleTax). If i am unemployed do i file taxes   If you operate your own business or have other self-employment income, such as from babysitting or selling crafts, see the following publications for more information. If i am unemployed do i file taxes Publication 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ). If i am unemployed do i file taxes Publication 535, Business Expenses. If i am unemployed do i file taxes Publication 587, Business Use of Your Home (Including Use by Daycare Providers). If i am unemployed do i file taxes Help from the IRS. If i am unemployed do i file taxes   There are many ways you can get help from the IRS. If i am unemployed do i file taxes These are explained under How To Get Tax Help in the back of this publication. If i am unemployed do i file taxes Comments and suggestions. If i am unemployed do i file taxes   We welcome your comments about this publication and your suggestions for future editions. If i am unemployed do i file taxes   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. If i am unemployed do i file taxes NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. If i am unemployed do i file taxes Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. If i am unemployed do i file taxes   You can send your comments from www. If i am unemployed do i file taxes irs. If i am unemployed do i file taxes gov/formspubs/. If i am unemployed do i file taxes Click on “More Information” and then on “Comment on Tax Forms and Publications”. If i am unemployed do i file taxes   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. If i am unemployed do i file taxes Ordering forms and publications. If i am unemployed do i file taxes   Visit www. If i am unemployed do i file taxes irs. If i am unemployed do i file taxes gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. If i am unemployed do i file taxes Internal Revenue Service 1201 N. If i am unemployed do i file taxes Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. If i am unemployed do i file taxes   If you have a tax question, check the information available on IRS. If i am unemployed do i file taxes gov or call 1-800-829-1040. If i am unemployed do i file taxes We cannot answer tax questions sent to either of the above addresses. If i am unemployed do i file taxes IRS mission. If i am unemployed do i file taxes   Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. If i am unemployed do i file taxes Table 1. If i am unemployed do i file taxes Legend of Icons Icon Explanation Items that may cause you particular problems, or an alert about pending legislation that may be enacted after this publication goes to print. If i am unemployed do i file taxes An Internet site or an email address. If i am unemployed do i file taxes An address you may need. If i am unemployed do i file taxes Items you should keep in your personal records. If i am unemployed do i file taxes Items you may need to figure or a worksheet you may need to complete and keep for your records. If i am unemployed do i file taxes An important phone number. If i am unemployed do i file taxes Helpful information you may need. 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The Agency, its Mission and Statutory Authority

The Agency
The IRS is a bureau of the Department of the Treasury and one of the world's most efficient tax administrators. In fiscal year 2012, the IRS collected more than $2.5 trillion in revenue and processed more than 237 million tax returns.

  • The IRS spent just 48 cents for each $100 it collected in FY 2012.
    (Source: Table 29, IRS 2012 Data Book.)

 


The IRS Mission
Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

This mission statement describes our role and the public’s expectation about how we should perform that role.

  • In the United States, the Congress passes tax laws and requires taxpayers to comply.
  • The taxpayer’s role is to understand and meet his or her tax obligations.
  • The IRS role is to help the large majority of compliant taxpayers with the tax law, while ensuring that the minority who are unwilling to comply pay their fair share.

 


Statutory Authority
The IRS is organized to carry out the responsibilities of the secretary of the Treasury under section 7801 of the Internal Revenue Code. The secretary has full authority to administer and enforce the internal revenue laws and has the power to create an agency to enforce these laws. The IRS was created based on this legislative grant.

Section 7803 of the Internal Revenue Code provides for the appointment of a commissioner of Internal Revenue to administer and supervise the execution and application of the internal revenue laws.


Address, Main Office

Internal Revenue Service
1111 Constitution Ave., NW
Washington, DC 20224

Page Last Reviewed or Updated: 12-Feb-2014

The If I Am Unemployed Do I File Taxes

If i am unemployed do i file taxes 15. If i am unemployed do i file taxes   Selling Your Home Table of Contents Reminder Introduction Useful Items - You may want to see: Main Home Figuring Gain or LossSelling Price Amount Realized Adjusted Basis Amount of Gain or Loss Dispositions Other Than Sales Determining Basis Excluding the GainMaximum Exclusion Ownership and Use Tests Reduced Maximum Exclusion Business Use or Rental of Home Reporting the SaleSeller-financed mortgage. If i am unemployed do i file taxes More information. If i am unemployed do i file taxes Special SituationsException for sales to related persons. If i am unemployed do i file taxes Recapturing (Paying Back) a Federal Mortgage Subsidy Reminder Home sold with undeducted points. If i am unemployed do i file taxes  If you have not deducted all the points you paid to secure a mortgage on your old home, you may be able to deduct the remaining points in the year of the sale. If i am unemployed do i file taxes See Mortgage ending early under Points in chapter 23. If i am unemployed do i file taxes Introduction This chapter explains the tax rules that apply when you sell your main home. If i am unemployed do i file taxes In most cases, your main home is the one in which you live most of the time. If i am unemployed do i file taxes If you sold your main home in 2013, you may be able to exclude from income any gain up to a limit of $250,000 ($500,000 on a joint return in most cases). If i am unemployed do i file taxes See Excluding the Gain , later. If i am unemployed do i file taxes Generally, if you can exclude all the gain, you do not need to report the sale on your tax return. If i am unemployed do i file taxes If you have gain that cannot be excluded, it is taxable. If i am unemployed do i file taxes Report it on Form 8949, Sales and Other Dispositions of Capital Assets, and Schedule D (Form 1040). If i am unemployed do i file taxes You may also have to complete Form 4797, Sales of Business Property. If i am unemployed do i file taxes See Reporting the Sale , later. If i am unemployed do i file taxes If you have a loss on the sale, you generally cannot deduct it on your return. If i am unemployed do i file taxes However, you may need to report it. If i am unemployed do i file taxes See Reporting the Sale , later. If i am unemployed do i file taxes The following are main topics in this chapter. If i am unemployed do i file taxes Figuring gain or loss. If i am unemployed do i file taxes Basis. If i am unemployed do i file taxes Excluding the gain. If i am unemployed do i file taxes Ownership and use tests. If i am unemployed do i file taxes Reporting the sale. If i am unemployed do i file taxes Other topics include the following. If i am unemployed do i file taxes Business use or rental of home. If i am unemployed do i file taxes Recapturing a federal mortgage subsidy. If i am unemployed do i file taxes Useful Items - You may want to see: Publication 523 Selling Your Home 530 Tax Information for Homeowners 547 Casualties, Disasters, and Thefts Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 982 Reduction of Tax Attributes Due to Discharge of Indebtedness 8828 Recapture of Federal Mortgage Subsidy 8949 Sales and Other Dispositions of Capital Assets Main Home This section explains the term “main home. If i am unemployed do i file taxes ” Usually, the home you live in most of the time is your main home and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. If i am unemployed do i file taxes To exclude gain under the rules of this chapter, you in most cases must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale. If i am unemployed do i file taxes Land. If i am unemployed do i file taxes   If you sell the land on which your main home is located, but not the house itself, you cannot exclude any gain you have from the sale of the land. If i am unemployed do i file taxes However, if you sell vacant land used as part of your main home and that is adjacent to it, you may be able to exclude the gain from the sale under certain circumstances. If i am unemployed do i file taxes See Vacant land under Main Home in Publication 523 for more information. If i am unemployed do i file taxes Example. If i am unemployed do i file taxes You buy a piece of land and move your main home to it. If i am unemployed do i file taxes Then you sell the land on which your main home was located. If i am unemployed do i file taxes This sale is not considered a sale of your main home, and you cannot exclude any gain on the sale of the land. If i am unemployed do i file taxes More than one home. If i am unemployed do i file taxes   If you have more than one home, you can exclude gain only from the sale of your main home. If i am unemployed do i file taxes You must include in income gain from the sale of any other home. If i am unemployed do i file taxes If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time during the year. If i am unemployed do i file taxes Example 1. If i am unemployed do i file taxes You own two homes, one in New York and one in Florida. If i am unemployed do i file taxes From 2009 through 2013, you live in the New York home for 7 months and in the Florida residence for 5 months of each year. If i am unemployed do i file taxes In the absence of facts and circumstances indicating otherwise, the New York home is your main home. If i am unemployed do i file taxes You would be eligible to exclude the gain from the sale of the New York home but not of the Florida home in 2013. If i am unemployed do i file taxes Example 2. If i am unemployed do i file taxes You own a house, but you live in another house that you rent. If i am unemployed do i file taxes The rented house is your main home. If i am unemployed do i file taxes Example 3. If i am unemployed do i file taxes You own two homes, one in Virginia and one in New Hampshire. If i am unemployed do i file taxes In 2009 and 2010, you lived in the Virginia home. If i am unemployed do i file taxes In 2011 and 2012, you lived in the New Hampshire home. If i am unemployed do i file taxes In 2013, you lived again in the Virginia home. If i am unemployed do i file taxes Your main home in 2009, 2010, and 2013 is the Virginia home. If i am unemployed do i file taxes Your main home in 2011 and 2012 is the New Hampshire home. If i am unemployed do i file taxes You would be eligible to exclude gain from the sale of either home (but not both) in 2013. If i am unemployed do i file taxes Property used partly as your main home. If i am unemployed do i file taxes   If you use only part of the property as your main home, the rules discussed in this publication apply only to the gain or loss on the sale of that part of the property. If i am unemployed do i file taxes For details, see Business Use or Rental of Home , later. If i am unemployed do i file taxes Figuring Gain or Loss To figure the gain or loss on the sale of your main home, you must know the selling price, the amount realized, and the adjusted basis. If i am unemployed do i file taxes Subtract the adjusted basis from the amount realized to get your gain or loss. If i am unemployed do i file taxes     Selling price     − Selling expenses       Amount realized       Amount realized     − Adjusted basis       Gain or loss   Selling Price The selling price is the total amount you receive for your home. If i am unemployed do i file taxes It includes money and the fair market value of any other property or any other services you receive and all notes, mortgages or other debts assumed by the buyer as part of the sale. If i am unemployed do i file taxes Payment by employer. If i am unemployed do i file taxes   You may have to sell your home because of a job transfer. If i am unemployed do i file taxes If your employer pays you for a loss on the sale or for your selling expenses, do not include the payment as part of the selling price. If i am unemployed do i file taxes Your employer will include it as wages in box 1 of your Form W-2, and you will include it in your income on Form 1040, line 7. If i am unemployed do i file taxes Option to buy. If i am unemployed do i file taxes   If you grant an option to buy your home and the option is exercised, add the amount you receive for the option to the selling price of your home. If i am unemployed do i file taxes If the option is not exercised, you must report the amount as ordinary income in the year the option expires. If i am unemployed do i file taxes Report this amount on Form 1040, line 21. If i am unemployed do i file taxes Form 1099-S. If i am unemployed do i file taxes   If you received Form 1099-S, Proceeds From Real Estate Transactions, box 2 (Gross proceeds) should show the total amount you received for your home. If i am unemployed do i file taxes   However, box 2 will not include the fair market value of any services or property other than cash or notes you received or will receive. If i am unemployed do i file taxes Instead, box 4 will be checked to indicate your receipt or expected receipt of these items. If i am unemployed do i file taxes Amount Realized The amount realized is the selling price minus selling expenses. If i am unemployed do i file taxes Selling expenses. If i am unemployed do i file taxes   Selling expenses include: Commissions, Advertising fees, Legal fees, and Loan charges paid by the seller, such as loan placement fees or “points. If i am unemployed do i file taxes ” Adjusted Basis While you owned your home, you may have made adjustments (increases or decreases) to the basis. If i am unemployed do i file taxes This adjusted basis must be determined before you can figure gain or loss on the sale of your home. If i am unemployed do i file taxes For information on how to figure your home's adjusted basis, see Determining Basis , later. If i am unemployed do i file taxes Amount of Gain or Loss To figure the amount of gain or loss, compare the amount realized to the adjusted basis. If i am unemployed do i file taxes Gain on sale. If i am unemployed do i file taxes   If the amount realized is more than the adjusted basis, the difference is a gain and, except for any part you can exclude, in most cases is taxable. If i am unemployed do i file taxes Loss on sale. If i am unemployed do i file taxes   If the amount realized is less than the adjusted basis, the difference is a loss. If i am unemployed do i file taxes A loss on the sale of your main home cannot be deducted. If i am unemployed do i file taxes Jointly owned home. If i am unemployed do i file taxes   If you and your spouse sell your jointly owned home and file a joint return, you figure your gain or loss as one taxpayer. If i am unemployed do i file taxes Separate returns. If i am unemployed do i file taxes   If you file separate returns, each of you must figure your own gain or loss according to your ownership interest in the home. If i am unemployed do i file taxes Your ownership interest is generally determined by state law. If i am unemployed do i file taxes Joint owners not married. If i am unemployed do i file taxes   If you and a joint owner other than your spouse sell your jointly owned home, each of you must figure your own gain or loss according to your ownership interest in the home. If i am unemployed do i file taxes Each of you applies the rules discussed in this chapter on an individual basis. If i am unemployed do i file taxes Dispositions Other Than Sales Some special rules apply to other dispositions of your main home. If i am unemployed do i file taxes Foreclosure or repossession. If i am unemployed do i file taxes   If your home was foreclosed on or repossessed, you have a disposition. If i am unemployed do i file taxes See Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments, to determine if you have ordinary income, gain, or loss. If i am unemployed do i file taxes Abandonment. If i am unemployed do i file taxes   If you abandon your home, see Publication 4681 to determine if you have ordinary income, gain, or loss. If i am unemployed do i file taxes Trading (exchanging) homes. If i am unemployed do i file taxes   If you trade your old home for another home, treat the trade as a sale and a purchase. If i am unemployed do i file taxes Example. If i am unemployed do i file taxes You owned and lived in a home with an adjusted basis of $41,000. If i am unemployed do i file taxes A real estate dealer accepted your old home as a trade-in and allowed you $50,000 toward a new home priced at $80,000. If i am unemployed do i file taxes This is treated as a sale of your old home for $50,000 with a gain of $9,000 ($50,000 – $41,000). If i am unemployed do i file taxes If the dealer had allowed you $27,000 and assumed your unpaid mortgage of $23,000 on your old home, your sales price would still be $50,000 (the $27,000 trade-in allowed plus the $23,000 mortgage assumed). If i am unemployed do i file taxes Transfer to spouse. If i am unemployed do i file taxes   If you transfer your home to your spouse or you transfer it to your former spouse incident to your divorce, you in most cases have no gain or loss. If i am unemployed do i file taxes This is true even if you receive cash or other consideration for the home. If i am unemployed do i file taxes As a result, the rules in this chapter do not apply. If i am unemployed do i file taxes More information. If i am unemployed do i file taxes   If you need more information, see Transfer to spouse in Publication 523 and Property Settlements in Publication 504, Divorced or Separated Individuals. If i am unemployed do i file taxes Involuntary conversion. If i am unemployed do i file taxes   You have a disposition when your home is destroyed or condemned and you receive other property or money in payment, such as insurance or a condemnation award. If i am unemployed do i file taxes This is treated as a sale and you may be able to exclude all or part of any gain from the destruction or condemnation of your home, as explained later under Special Situations . If i am unemployed do i file taxes Determining Basis You need to know your basis in your home to figure any gain or loss when you sell it. If i am unemployed do i file taxes Your basis in your home is determined by how you got the home. If i am unemployed do i file taxes Generally, your basis is its cost if you bought it or built it. If i am unemployed do i file taxes If you got it in some other way (inheritance, gift, etc. If i am unemployed do i file taxes ), your basis is generally either its fair market value when you received it or the adjusted basis of the previous owner. If i am unemployed do i file taxes While you owned your home, you may have made adjustments (increases or decreases) to your home's basis. If i am unemployed do i file taxes The result of these adjustments is your home's adjusted basis, which is used to figure gain or loss on the sale of your home. If i am unemployed do i file taxes See Adjusted Basis , later. If i am unemployed do i file taxes You can find more information on basis and adjusted basis in chapter 13 of this publication and in Publication 523. If i am unemployed do i file taxes Cost As Basis The cost of property is the amount you paid for it in cash, debt obligations, other property, or services. If i am unemployed do i file taxes Purchase. If i am unemployed do i file taxes   If you bought your home, your basis is its cost to you. If i am unemployed do i file taxes This includes the purchase price and certain settlement or closing costs. If i am unemployed do i file taxes In most cases, your purchase price includes your down payment and any debt, such as a first or second mortgage or notes you gave the seller in payment for the home. If i am unemployed do i file taxes If you build, or contract to build, a new home, your purchase price can include costs of construction, as discussed in Publication 523. If i am unemployed do i file taxes Settlement fees or closing costs. If i am unemployed do i file taxes   When you bought your home, you may have paid settlement fees or closing costs in addition to the contract price of the property. If i am unemployed do i file taxes You can include in your basis some of the settlement fees and closing costs you paid for buying the home, but not the fees and costs for getting a mortgage loan. If i am unemployed do i file taxes A fee paid for buying the home is any fee you would have had to pay even if you paid cash for the home (that is, without the need for financing). If i am unemployed do i file taxes    Chapter 13 lists some of the settlement fees and closing costs that you can include in the basis of property, including your home. If i am unemployed do i file taxes It also lists some settlement costs that cannot be included in basis. If i am unemployed do i file taxes   Also see Publication 523 for additional items and a discussion of basis other than cost. If i am unemployed do i file taxes Adjusted Basis Adjusted basis is your cost or other basis increased or decreased by certain amounts. If i am unemployed do i file taxes To figure your adjusted basis, you can use Worksheet 1 in Publication 523. If i am unemployed do i file taxes Do not use Worksheet 1 if you acquired an interest in your home from a decedent who died in 2010 and whose executor filed Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent. If i am unemployed do i file taxes Increases to basis. If i am unemployed do i file taxes   These include the following. If i am unemployed do i file taxes Additions and other improvements that have a useful life of more than 1 year. If i am unemployed do i file taxes Special assessments for local improvements. If i am unemployed do i file taxes Amounts you spent after a casualty to restore damaged property. If i am unemployed do i file taxes Improvements. If i am unemployed do i file taxes   These add to the value of your home, prolong its useful life, or adapt it to new uses. If i am unemployed do i file taxes You add the cost of additions and other improvements to the basis of your property. If i am unemployed do i file taxes   For example, putting a recreation room or another bathroom in your unfinished basement, putting up a new fence, putting in new plumbing or wiring, putting on a new roof, or paving your unpaved driveway are improvements. If i am unemployed do i file taxes An addition to your house, such as a new deck, a sunroom, or a new garage, is also an improvement. If i am unemployed do i file taxes Repairs. If i am unemployed do i file taxes   These maintain your home in good condition but do not add to its value or prolong its life. If i am unemployed do i file taxes You do not add their cost to the basis of your property. If i am unemployed do i file taxes   Examples of repairs include repainting your house inside or outside, fixing your gutters or floors, repairing leaks or plastering, and replacing broken window panes. If i am unemployed do i file taxes Decreases to basis. If i am unemployed do i file taxes   These include the following. If i am unemployed do i file taxes Discharge of qualified principal residence indebtedness that was excluded from income. If i am unemployed do i file taxes Some or all of the cancellation of debt income that was excluded due to your bankruptcy or insolvency. If i am unemployed do i file taxes For details, see Publication 4681. If i am unemployed do i file taxes Gain you postponed from the sale of a previous home before May 7, 1997. If i am unemployed do i file taxes Deductible casualty losses. If i am unemployed do i file taxes Insurance payments you received or expect to receive for casualty losses. If i am unemployed do i file taxes Payments you received for granting an easement or right-of-way. If i am unemployed do i file taxes Depreciation allowed or allowable if you used your home for business or rental purposes. If i am unemployed do i file taxes Energy-related credits allowed for expenditures made on the residence. If i am unemployed do i file taxes (Reduce the increase in basis otherwise allowable for expenditures on the residence by the amount of credit allowed for those expenditures. If i am unemployed do i file taxes ) Adoption credit you claimed for improvements added to the basis of your home. If i am unemployed do i file taxes Nontaxable payments from an adoption assistance program of your employer you used for improvements you added to the basis of your home. If i am unemployed do i file taxes Energy conservation subsidy excluded from your gross income because you received it (directly or indirectly) from a public utility after 1992 to buy or install any energy conservation measure. If i am unemployed do i file taxes An energy conservation measure is an installation or modification primarily designed either to reduce consumption of electricity or natural gas or to improve the management of energy demand for a home. If i am unemployed do i file taxes District of Columbia first-time homebuyer credit (allowed on the purchase of a principal residence in the District of Columbia beginning on August 5, 1997 and before January 1, 2012). If i am unemployed do i file taxes General sales taxes (allowed beginning 2004 and ending before 2014) claimed as an itemized deduction on Schedule A (Form 1040) that were imposed on the purchase of personal property, such as a houseboat used as your home or a mobile home. If i am unemployed do i file taxes Discharges of qualified principal residence indebtedness. If i am unemployed do i file taxes   You may be able to exclude from gross income a discharge of qualified principal residence indebtedness. If i am unemployed do i file taxes This exclusion applies to discharges made after 2006 and before 2014. If i am unemployed do i file taxes If you choose to exclude this income, you must reduce (but not below zero) the basis of the principal residence by the amount excluded from your gross income. If i am unemployed do i file taxes   File Form 982 with your tax return. If i am unemployed do i file taxes See the form's instructions for detailed information. If i am unemployed do i file taxes Recordkeeping. If i am unemployed do i file taxes You should keep records to prove your home's adjusted basis. If i am unemployed do i file taxes Ordinarily, you must keep records for 3 years after the due date for filing your return for the tax year in which you sold your home. If i am unemployed do i file taxes But if you sold a home before May 7, 1997, and postponed tax on any gain, the basis of that home affects the basis of the new home you bought. If i am unemployed do i file taxes Keep records proving the basis of both homes as long as they are needed for tax purposes. If i am unemployed do i file taxes The records you should keep include: Proof of the home's purchase price and purchase expenses, Receipts and other records for all improvements, additions, and other items that affect the home's adjusted basis, Any worksheets or other computations you used to figure the adjusted basis of the home you sold, the gain or loss on the sale, the exclusion, and the taxable gain, Any Form 982 you filed to report any discharge of qualified principal residence indebtedness, Any Form 2119, Sale of Your Home, you filed to postpone gain from the sale of a previous home before May 7, 1997, and Any worksheets you used to prepare Form 2119, such as the Adjusted Basis of Home Sold Worksheet or the Capital Improvements Worksheet from the Form 2119 instructions, or other source of computations. If i am unemployed do i file taxes Excluding the Gain You may qualify to exclude from your income all or part of any gain from the sale of your main home. If i am unemployed do i file taxes This means that, if you qualify, you will not have to pay tax on the gain up to the limit described under Maximum Exclusion , next. If i am unemployed do i file taxes To qualify, you must meet the ownership and use tests described later. If i am unemployed do i file taxes You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. If i am unemployed do i file taxes You can use Worksheet 2 in Publication 523 to figure the amount of your exclusion and your taxable gain, if any. If i am unemployed do i file taxes If you have any taxable gain from the sale of your home, you may have to increase your withholding or make estimated tax payments. If i am unemployed do i file taxes See Publication 505, Tax Withholding and Estimated Tax. If i am unemployed do i file taxes Maximum Exclusion You can exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. If i am unemployed do i file taxes You meet the ownership test. If i am unemployed do i file taxes You meet the use test. If i am unemployed do i file taxes During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. If i am unemployed do i file taxes For details on gain allocated to periods of nonqualified use, see Periods of nonqualified use , later. If i am unemployed do i file taxes You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . If i am unemployed do i file taxes Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. If i am unemployed do i file taxes This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). If i am unemployed do i file taxes Exception. If i am unemployed do i file taxes   If you owned and lived in the property as your main home for less than 2 years, you can still claim an exclusion in some cases. If i am unemployed do i file taxes However, the maximum amount you may be able to exclude will be reduced. If i am unemployed do i file taxes See Reduced Maximum Exclusion , later. If i am unemployed do i file taxes Example 1—home owned and occupied for at least 2 years. If i am unemployed do i file taxes Mya bought and moved into her main home in September 2011. If i am unemployed do i file taxes She sold the home at a gain in October 2013. If i am unemployed do i file taxes During the 5-year period ending on the date of sale in October 2013, she owned and lived in the home for more than 2 years. If i am unemployed do i file taxes She meets the ownership and use tests. If i am unemployed do i file taxes Example 2—ownership test met but use test not met. If i am unemployed do i file taxes Ayden bought a home, lived in it for 6 months, moved out, and never occupied the home again. If i am unemployed do i file taxes He later sold the home for a gain. If i am unemployed do i file taxes He owned the home during the entire 5-year period ending on the date of sale. If i am unemployed do i file taxes He meets the ownership test but not the use test. If i am unemployed do i file taxes He cannot exclude any part of his gain on the sale unless he qualified for a reduced maximum exclusion (explained later). If i am unemployed do i file taxes Period of Ownership and Use The required 2 years of ownership and use during the 5-year period ending on the date of the sale do not have to be continuous nor do they both have to occur at the same time. If i am unemployed do i file taxes You meet the tests if you can show that you owned and lived in the property as your main home for either 24 full months or 730 days (365 × 2) during the 5-year period ending on the date of sale. If i am unemployed do i file taxes Temporary absence. If i am unemployed do i file taxes   Short temporary absences for vacations or other seasonal absences, even if you rent out the property during the absences, are counted as periods of use. If i am unemployed do i file taxes The following examples assume that the reduced maximum exclusion (discussed later) does not apply to the sales. If i am unemployed do i file taxes Example 1. If i am unemployed do i file taxes David Johnson, who is single, bought and moved into his home on February 1, 2011. If i am unemployed do i file taxes Each year during 2011 and 2012, David left his home for a 2-month summer vacation. If i am unemployed do i file taxes David sold the house on March 1, 2013. If i am unemployed do i file taxes Although the total time David used his home is less than 2 years (21 months), he meets the requirement and may exclude gain. If i am unemployed do i file taxes The 2-month vacations are short temporary absences and are counted as periods of use in determining whether David used the home for the required 2 years. If i am unemployed do i file taxes Example 2. If i am unemployed do i file taxes Professor Paul Beard, who is single, bought and moved into a house on August 18, 2010. If i am unemployed do i file taxes He lived in it as his main home continuously until January 5, 2012, when he went abroad for a 1-year sabbatical leave. If i am unemployed do i file taxes On February 6, 2013, 1 month after returning from the leave, Paul sold the house at a gain. If i am unemployed do i file taxes Because his leave was not a short temporary absence, he cannot include the period of leave to meet the 2-year use test. If i am unemployed do i file taxes He cannot exclude any part of his gain, because he did not use the residence for the required 2 years. If i am unemployed do i file taxes Ownership and use tests met at different times. If i am unemployed do i file taxes   You can meet the ownership and use tests during different 2-year periods. If i am unemployed do i file taxes However, you must meet both tests during the 5-year period ending on the date of the sale. If i am unemployed do i file taxes Example. If i am unemployed do i file taxes Beginning in 2002, Helen Jones lived in a rented apartment. If i am unemployed do i file taxes The apartment building was later converted to condominiums, and she bought her same apartment on December 3, 2010. If i am unemployed do i file taxes In 2011, Helen became ill and on April 14 of that year she moved to her daughter's home. If i am unemployed do i file taxes On July 12, 2013, while still living in her daughter's home, she sold her condominium. If i am unemployed do i file taxes Helen can exclude gain on the sale of her condominium because she met the ownership and use tests during the 5-year period from July 13, 2008, to July 12, 2013, the date she sold the condominium. If i am unemployed do i file taxes She owned her condominium from December 3, 2010, to July 12, 2013 (more than 2 years). If i am unemployed do i file taxes She lived in the property from July 13, 2008 (the beginning of the 5-year period), to April 14, 2011 (more than 2 years). If i am unemployed do i file taxes The time Helen lived in her daughter's home during the 5-year period can be counted toward her period of ownership, and the time she lived in her rented apartment during the 5-year period can be counted toward her period of use. If i am unemployed do i file taxes Cooperative apartment. If i am unemployed do i file taxes   If you sold stock as a tenant-stockholder in a cooperative housing corporation, the ownership and use tests are met if, during the 5-year period ending on the date of sale, you: Owned the stock for at least 2 years, and Lived in the house or apartment that the stock entitles you to occupy as your main home for at least 2 years. If i am unemployed do i file taxes Exceptions to Ownership and Use Tests The following sections contain exceptions to the ownership and use tests for certain taxpayers. If i am unemployed do i file taxes Exception for individuals with a disability. If i am unemployed do i file taxes   There is an exception to the use test if: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year during the 5-year period before the sale of your home. If i am unemployed do i file taxes Under this exception, you are considered to live in your home during any time within the 5-year period that you own the home and live in a facility (including a nursing home) licensed by a state or political subdivision to care for persons in your condition. If i am unemployed do i file taxes If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. If i am unemployed do i file taxes Previous home destroyed or condemned. If i am unemployed do i file taxes   For the ownership and use tests, you add the time you owned and lived in a previous home that was destroyed or condemned to the time you owned and lived in the replacement home on whose sale you wish to exclude gain. If i am unemployed do i file taxes This rule applies if any part of the basis of the home you sold depended on the basis of the destroyed or condemned home. If i am unemployed do i file taxes Otherwise, you must have owned and lived in the same home for 2 of the 5 years before the sale to qualify for the exclusion. If i am unemployed do i file taxes Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps. If i am unemployed do i file taxes   You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve on “qualified official extended duty” as a member of the uniformed services or Foreign Service of the United States, or as an employee of the intelligence community. If i am unemployed do i file taxes You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve outside the United States either as an employee of the Peace Corps on "qualified official extended duty" or as an enrolled volunteer or volunteer leader of the Peace Corps. If i am unemployed do i file taxes This means that you may be able to meet the 2-year use test even if, because of your service, you did not actually live in your home for at least the required 2 years during the 5-year period ending on the date of sale. If i am unemployed do i file taxes   If this helps you qualify to exclude gain, you can choose to have the 5-year test period suspended by filing a return for the year of sale that does not include the gain. If i am unemployed do i file taxes For more information about the suspension of the 5-year test period, see Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps in Publication 523. If i am unemployed do i file taxes Married Persons If you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use tests, you can exclude up to $250,000 of the gain. If i am unemployed do i file taxes (But see Special rules for joint returns , next. If i am unemployed do i file taxes ) Special rules for joint returns. If i am unemployed do i file taxes   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. If i am unemployed do i file taxes You are married and file a joint return for the year. If i am unemployed do i file taxes Either you or your spouse meets the ownership test. If i am unemployed do i file taxes Both you and your spouse meet the use test. If i am unemployed do i file taxes During the 2-year period ending on the date of the sale, neither you nor your spouse excluded gain from the sale of another home. If i am unemployed do i file taxes If either spouse does not satisfy all these requirements, the maximum exclusion that can be claimed by the couple is the total of the maximum exclusions that each spouse would qualify for if not married and the amounts were figured separately. If i am unemployed do i file taxes For this purpose, each spouse is treated as owning the property during the period that either spouse owned the property. If i am unemployed do i file taxes Example 1—one spouse sells a home. If i am unemployed do i file taxes Emily sells her home in June 2013 for a gain of $300,000. If i am unemployed do i file taxes She marries Jamie later in the year. If i am unemployed do i file taxes She meets the ownership and use tests, but Jamie does not. If i am unemployed do i file taxes Emily can exclude up to $250,000 of gain on a separate or joint return for 2013. If i am unemployed do i file taxes The $500,000 maximum exclusion for certain joint returns does not apply because Jamie does not meet the use test. If i am unemployed do i file taxes Example 2—each spouse sells a home. If i am unemployed do i file taxes The facts are the same as in Example 1 except that Jamie also sells a home in 2013 for a gain of $200,000 before he marries Emily. If i am unemployed do i file taxes He meets the ownership and use tests on his home, but Emily does not. If i am unemployed do i file taxes Emily can exclude $250,000 of gain and Jamie can exclude $200,000 of gain on the respective sales of their individual homes. If i am unemployed do i file taxes However, Emily cannot use Jamie's unused exclusion to exclude more than $250,000 of gain. If i am unemployed do i file taxes Therefore, Emily and Jamie must recognize $50,000 of gain on the sale of Emily's home. If i am unemployed do i file taxes The $500,000 maximum exclusion for certain joint returns does not apply because Emily and Jamie do not both meet the use test for the same home. If i am unemployed do i file taxes Sale of main home by surviving spouse. If i am unemployed do i file taxes   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. If i am unemployed do i file taxes   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. If i am unemployed do i file taxes The sale or exchange took place after 2008. If i am unemployed do i file taxes The sale or exchange took place no more than 2 years after the date of death of your spouse. If i am unemployed do i file taxes You have not remarried. If i am unemployed do i file taxes You and your spouse met the use test at the time of your spouse's death. If i am unemployed do i file taxes You or your spouse met the ownership test at the time of your spouse's death. If i am unemployed do i file taxes Neither you nor your spouse excluded gain from the sale of another home during the last 2 years. If i am unemployed do i file taxes Example. If i am unemployed do i file taxes   Harry owned and used a house as his main home since 2009. If i am unemployed do i file taxes Harry and Wilma married on July 1, 2013, and from that date they use Harry's house as their main home. If i am unemployed do i file taxes Harry died on August 15, 2013, and Wilma inherited the property. If i am unemployed do i file taxes Wilma sold the property on September 3, 2013, at which time she had not remarried. If i am unemployed do i file taxes Although Wilma owned and used the house for less than 2 years, Wilma is considered to have satisfied the ownership and use tests because her period of ownership and use includes the period that Harry owned and used the property before death. If i am unemployed do i file taxes Home transferred from spouse. If i am unemployed do i file taxes   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. If i am unemployed do i file taxes Use of home after divorce. If i am unemployed do i file taxes   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. If i am unemployed do i file taxes Reduced Maximum Exclusion If you fail to meet the requirements to qualify for the $250,000 or $500,000 exclusion, you may still qualify for a reduced exclusion. If i am unemployed do i file taxes This applies to those who: Fail to meet the ownership and use tests, or Have used the exclusion within 2 years of selling their current home. If i am unemployed do i file taxes In both cases, to qualify for a reduced exclusion, the sale of your main home must be due to one of the following reasons. If i am unemployed do i file taxes A change in place of employment. If i am unemployed do i file taxes Health. If i am unemployed do i file taxes Unforeseen circumstances. If i am unemployed do i file taxes Unforeseen circumstances. If i am unemployed do i file taxes   The sale of your main home is because of an unforeseen circumstance if your primary reason for the sale is the occurrence of an event that you could not reasonably have anticipated before buying and occupying your main home. If i am unemployed do i file taxes   See Publication 523 for more information and to use Worksheet 3 to figure your reduced maximum exclusion. If i am unemployed do i file taxes Business Use or Rental of Home You may be able to exclude gain from the sale of a home you have used for business or to produce rental income. If i am unemployed do i file taxes But you must meet the ownership and use tests. If i am unemployed do i file taxes Periods of nonqualified use. If i am unemployed do i file taxes   In most cases, gain from the sale or exchange of your main home will not qualify for the exclusion to the extent that the gains are allocated to periods of nonqualified use. If i am unemployed do i file taxes Nonqualified use is any period after 2008 during which neither you nor your spouse (or your former spouse) used the property as a main home with the following exceptions. If i am unemployed do i file taxes Exceptions. If i am unemployed do i file taxes   A period of nonqualified use does not include: Any portion of the 5-year period ending on the date of the sale or exchange after the last date you (or your spouse) use the property as a main home; Any period (not to exceed an aggregate period of 10 years) during which you (or your spouse) are serving on qualified official extended duty: As a member of the uniformed services; As a member of the Foreign Service of the United States; or As an employee of the intelligence community; and Any other period of temporary absence (not to exceed an aggregate period of 2 years) due to change of employment, health conditions, or such other unforeseen circumstances as may be specified by the IRS. If i am unemployed do i file taxes The gain resulting from the sale of the property is allocated between qualified and nonqualified use periods based on the amount of time the property was held for qualified and nonqualified use. If i am unemployed do i file taxes Gain from the sale or exchange of a main home allocable to periods of qualified use will continue to qualify for the exclusion for the sale of your main home. If i am unemployed do i file taxes Gain from the sale or exchange of property allocable to nonqualified use will not qualify for the exclusion. If i am unemployed do i file taxes Calculation. If i am unemployed do i file taxes   To figure the portion of the gain allocated to the period of nonqualified use, multiply the gain by the following fraction:   Total nonqualified use during the period of ownership after 2008      Total period of ownership     This calculation can be found in Worksheet 2, line 10, in Publication 523. If i am unemployed do i file taxes Example 1. If i am unemployed do i file taxes On May 23, 2007, Amy, who is unmarried for all years in this example, bought a house. If i am unemployed do i file taxes She moved in on that date and lived in it until May 31, 2009, when she moved out of the house and put it up for rent. If i am unemployed do i file taxes The house was rented from June 1, 2009, to March 31, 2011. If i am unemployed do i file taxes Amy claimed depreciation deductions in 2009 through 2011 totaling $10,000. If i am unemployed do i file taxes Amy moved back into the house on April 1, 2011, and lived there until she sold it on January 31, 2013, for a gain of $200,000. If i am unemployed do i file taxes During the 5-year period ending on the date of the sale (January 31, 2008-January 31, 2013), Amy owned and lived in the house for more than 2 years as shown in the following table. If i am unemployed do i file taxes Five Year Period Used as  Home Used as  Rental 1/31/08 – 5/31/09 16 months       6/1/09 – 3/31/11   22 months 4/1/11 – 1/31/13 22 months         38 months 22 months During the period Amy owned the house (2,080 days), her period of nonqualified use was 668 days. If i am unemployed do i file taxes Amy divides 668 by 2,080 and obtains a decimal (rounded to at least three decimal places) of 0. If i am unemployed do i file taxes 321. If i am unemployed do i file taxes To figure her gain attributable to the period of nonqualified use, she multiplies $190,000 (the gain not attributable to the $10,000 depreciation deduction) by 0. If i am unemployed do i file taxes 321. If i am unemployed do i file taxes Because the gain attributable to periods of nonqualified use is $60,990, Amy can exclude $129,010 of her gain. If i am unemployed do i file taxes Example 2. If i am unemployed do i file taxes William owned and used a house as his main home from 2007 through 2010. If i am unemployed do i file taxes On January 1, 2011, he moved to another state. If i am unemployed do i file taxes He rented his house from that date until April 30, 2013, when he sold it. If i am unemployed do i file taxes During the 5-year period ending on the date of sale (May 1, 2008-April 30, 2013), William owned and lived in the house for more than 2 years. If i am unemployed do i file taxes He must report the sale on Form 4797 because it was rental property at the time of sale. If i am unemployed do i file taxes Because the period of nonqualified use does not include any part of the 5-year period after the last date William lived in the house, he has no period of nonqualified use. If i am unemployed do i file taxes Because he met the ownership and use tests, he can exclude gain up to $250,000. If i am unemployed do i file taxes However, he cannot exclude the part of the gain equal to the depreciation he claimed or could have claimed for renting the house, as explained next. If i am unemployed do i file taxes Depreciation after May 6, 1997. If i am unemployed do i file taxes   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. If i am unemployed do i file taxes If you can show by adequate records or other evidence that the depreciation allowed was less than the amount allowable, then you may limit the amount of gain recognized to the depreciation allowed. If i am unemployed do i file taxes See Publication 544 for more information. If i am unemployed do i file taxes Property used partly for business or rental. If i am unemployed do i file taxes   If you used property partly as a home and partly for business or to produce rental income, see Publication 523. If i am unemployed do i file taxes Reporting the Sale Do not report the 2013 sale of your main home on your tax return unless: You have a gain and do not qualify to exclude all of it, You have a gain and choose not to exclude it, or You received Form 1099-S. If i am unemployed do i file taxes If any of these conditions apply, report the entire gain or loss. If i am unemployed do i file taxes For details on how to report the gain or loss, see the Instructions for Schedule D (Form 1040) and the Instructions for Form 8949. If i am unemployed do i file taxes If you used the home for business or to produce rental income, you may have to use Form 4797 to report the sale of the business or rental part (or the sale of the entire property if used entirely for business or rental). If i am unemployed do i file taxes See Business Use or Rental of Home in Publication 523 and the Instructions for Form 4797. If i am unemployed do i file taxes Installment sale. If i am unemployed do i file taxes    Some sales are made under arrangements that provide for part or all of the selling price to be paid in a later year. If i am unemployed do i file taxes These sales are called “installment sales. If i am unemployed do i file taxes ” If you finance the buyer's purchase of your home yourself instead of having the buyer get a loan or mortgage from a bank, you probably have an installment sale. If i am unemployed do i file taxes You may be able to report the part of the gain you cannot exclude on the installment basis. If i am unemployed do i file taxes    Use Form 6252, Installment Sale Income, to report the sale. If i am unemployed do i file taxes Enter your exclusion on line 15 of Form 6252. If i am unemployed do i file taxes Seller-financed mortgage. If i am unemployed do i file taxes   If you sell your home and hold a note, mortgage, or other financial agreement, the payments you receive in most cases consist of both interest and principal. If i am unemployed do i file taxes You must separately report as interest income the interest you receive as part of each payment. If i am unemployed do i file taxes If the buyer of your home uses the property as a main or second home, you must also report the name, address, and social security number (SSN) of the buyer on line 1 of Schedule B (Form 1040A or 1040). If i am unemployed do i file taxes The buyer must give you his or her SSN, and you must give the buyer your SSN. If i am unemployed do i file taxes Failure to meet these requirements may result in a $50 penalty for each failure. If i am unemployed do i file taxes If either you or the buyer does not have and is not eligible to get an SSN, see Social Security Number in chapter 1. If i am unemployed do i file taxes More information. If i am unemployed do i file taxes   For more information on installment sales, see Publication 537, Installment Sales. If i am unemployed do i file taxes Special Situations The situations that follow may affect your exclusion. If i am unemployed do i file taxes Sale of home acquired in a like-kind exchange. If i am unemployed do i file taxes   You cannot claim the exclusion if: You acquired your home in a like-kind exchange (also known as a section 1031 exchange), or your basis in your home is determined by reference to the basis of the home in the hands of the person who acquired the property in a like-kind exchange (for example, you received the home from that person as a gift), and You sold the home during the 5-year period beginning with the date your home was acquired in the like-kind exchange. If i am unemployed do i file taxes Gain from a like-kind exchange is not taxable at the time of the exchange. If i am unemployed do i file taxes This means that gain will not be taxed until you sell or otherwise dispose of the property you receive. If i am unemployed do i file taxes To defer gain from a like-kind exchange, you must have exchanged business or investment property for business or investment property of a like kind. If i am unemployed do i file taxes For more information about like-kind exchanges, see Publication 544, Sales and Other Dispositions of Assets. If i am unemployed do i file taxes Home relinquished in a like-kind exchange. If i am unemployed do i file taxes   If you use your main home partly for business or rental purposes and then exchange the home for another property, see Publication 523. If i am unemployed do i file taxes Expatriates. If i am unemployed do i file taxes   You cannot claim the exclusion if the expatriation tax applies to you. If i am unemployed do i file taxes The expatriation tax applies to certain U. If i am unemployed do i file taxes S. If i am unemployed do i file taxes citizens who have renounced their citizenship (and to certain long-term residents who have ended their residency). If i am unemployed do i file taxes For more information about the expatriation tax, see Expatriation Tax in chapter 4 of Publication 519, U. If i am unemployed do i file taxes S. If i am unemployed do i file taxes Tax Guide for Aliens. If i am unemployed do i file taxes Home destroyed or condemned. If i am unemployed do i file taxes   If your home was destroyed or condemned, any gain (for example, because of insurance proceeds you received) qualifies for the exclusion. If i am unemployed do i file taxes   Any part of the gain that cannot be excluded (because it is more than the maximum exclusion) can be postponed under the rules explained in: Publication 547, in the case of a home that was destroyed, or Publication 544, chapter 1, in the case of a home that was condemned. If i am unemployed do i file taxes Sale of remainder interest. If i am unemployed do i file taxes   Subject to the other rules in this chapter, you can choose to exclude gain from the sale of a remainder interest in your home. If i am unemployed do i file taxes If you make this choice, you cannot choose to exclude gain from your sale of any other interest in the home that you sell separately. If i am unemployed do i file taxes Exception for sales to related persons. If i am unemployed do i file taxes   You cannot exclude gain from the sale of a remainder interest in your home to a related person. If i am unemployed do i file taxes Related persons include your brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. If i am unemployed do i file taxes ), and lineal descendants (children, grandchildren, etc. If i am unemployed do i file taxes ). If i am unemployed do i file taxes Related persons also include certain corporations, partnerships, trusts, and exempt organizations. If i am unemployed do i file taxes Recapturing (Paying Back) a Federal Mortgage Subsidy If you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. If i am unemployed do i file taxes You recapture the benefit by increasing your federal income tax for the year of the sale. If i am unemployed do i file taxes You may have to pay this recapture tax even if you can exclude your gain from income under the rules discussed earlier; that exclusion does not affect the recapture tax. If i am unemployed do i file taxes Loans subject to recapture rules. If i am unemployed do i file taxes   The recapture applies to loans that: Came from the proceeds of qualified mortgage bonds, or Were based on mortgage credit certificates. If i am unemployed do i file taxes The recapture also applies to assumptions of these loans. If i am unemployed do i file taxes When recapture applies. If i am unemployed do i file taxes   Recapture of the federal mortgage subsidy applies only if you meet both of the following conditions. If i am unemployed do i file taxes You sell or otherwise dispose of your home at a gain within the first 9 years after the date you close your mortgage loan. If i am unemployed do i file taxes Your income for the year of disposition is more than that year's adjusted qualifying income for your family size for that year (related to the income requirements a person must meet to qualify for the federally subsidized program). If i am unemployed do i file taxes When recapture does not apply. If i am unemployed do i file taxes   Recapture does not apply in any of the following situations. If i am unemployed do i file taxes Your mortgage loan was a qualified home improvement loan (QHIL) of not more than $15,000 used for alterations, repairs, and improvements that protect or improve the basic livability or energy efficiency of your home. If i am unemployed do i file taxes Your mortgage loan was a QHIL of not more than $150,000 in the case of a QHIL used to repair damage from Hurricane Katrina to homes in the hurricane disaster area; a QHIL funded by a qualified mortgage bond that is a qualified Gulf Opportunity Zone Bond; or a QHIL for an owner-occupied home in the Gulf Opportunity Zone (GO Zone), Rita GO Zone, or Wilma GO Zone. If i am unemployed do i file taxes For more information, see Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma. If i am unemployed do i file taxes Also see Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas. If i am unemployed do i file taxes The home is disposed of as a result of your death. If i am unemployed do i file taxes You dispose of the home more than 9 years after the date you closed your mortgage loan. If i am unemployed do i file taxes You transfer the home to your spouse, or to your former spouse incident to a divorce, where no gain is included in your income. If i am unemployed do i file taxes You dispose of the home at a loss. If i am unemployed do i file taxes Your home is destroyed by a casualty, and you replace it on its original site within 2 years after the end of the tax year when the destruction happened. If i am unemployed do i file taxes The replacement period is extended for main homes destroyed in a federally declared disaster area, a Midwestern disaster area, the Kansas disaster area, and the Hurricane Katrina disaster area. If i am unemployed do i file taxes For more information, see Replacement Period in Publication 547. If i am unemployed do i file taxes You refinance your mortgage loan (unless you later meet the conditions listed previously under When recapture applies ). If i am unemployed do i file taxes Notice of amounts. If i am unemployed do i file taxes   At or near the time of settlement of your mortgage loan, you should receive a notice that provides the federally subsidized amount and other information you will need to figure your recapture tax. If i am unemployed do i file taxes How to figure and report the recapture. If i am unemployed do i file taxes    The recapture tax is figured on Form 8828. If i am unemployed do i file taxes If you sell your home and your mortgage is subject to recapture rules, you must file Form 8828 even if you do not owe a recapture tax. If i am unemployed do i file taxes Attach Form 8828 to your Form 1040. If i am unemployed do i file taxes For more information, see Form 8828 and its instructions. 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