Reduced Exclusion Worksheet for Gain on Sale of Your Home

Most taxpayers can qualify for a $250,000 exclusion of gain on the sale of their home, if they have lived in the home for at least two years out of the five years immediately preceding the sale. Taxpayers who are married filing jointly may qualify for a double exclusion of $500,000.

But what if you can't meet the two-year requirement? The tax laws do permit a partial exclusion if your reason for not meeting the two-year rule is that you suffered a change in place of employment, health or other unforeseen circumstances.

You can compute your partial exclusion by using the worksheet provided below. Do not file the worksheet with your tax return, but keep it in your permanent records.

reduced exclusion worksheet

The file is in rich text format (RTF) that is suitable for use with most word processing programs used in the Windows environment.

For more information, see our discussion of the reduced exclusion.