And every year, like I have since … oh … 1998 or there abouts, I sit down and start filling out the dreaded 1040. Yup, because of mortgages, stocks, self-employment and other fun stuff, I get the fun of doing the long form, with schedules and everything.
Fun, fun, fun.
I suppose I could have my accountant do all this grunt work for me (and that's what it is really—tedious; it's not hard if you can keep awake from reading the dreadfully dry government prose) but that would mean I would have to actually find an accountant. And, like, pay an accountant.
And darn it!—it shouldn't take a highly paid specialist to fill out a lousy form. I'm convinced that a real tax reform will only come about when more and more people start doing their own taxes and see just how tedious this can be.
If you sold or exchanged your main home, do not report it on your tax return unless your gain exceeds your exclusion amount.
Generally, if you meet the two tests below, you can exclude up to $250,000 of gain. If both you and your spouse meet these tests and you file a joint return, you can exclude up to $500,000 of gain (but only one spouse needs to meet the ownership requirement in Test 1).
Test 1. You owned and used the home as your main home for 2 years or more during the 5-year period ending on the date you sold or exchanged your home.
Test 2. You have not sold or exchanged another main home during the 2-year period ending on the date of the sale or exchange of your home.
See Pub. 523 for details, including how to report any taxable gain if:
- You do not meet one of he above two tests,
- You (or your spouse if married) used any part of the home for busiess or rental purposes after May 6, 1997, or
- You gain exceeds your exclusion amount.
Woo hoo! Doing the Happy Dance!
When this is all over, the Federal Government may end up owing me money!
And that, generally speaking, is such a nice feeling.