This section discusses reporting the sale of a taxpayer's main residence on Schedule D.
You will need to know if the home was the taxpayer's main home, if the taxpayer meets the ownership and use tests, and if the gain is more than the allowed exclusion.
Taxpayers must report the sale of a home when one of the following is true:
For additional information to help you make this determination, refer to the Selling Your Home Chapter in Publication 17 or Publication 523.
Special rules apply to foreclosures and cancellation of debt related to a taxpayer's principal residence. A foreclosure is treated as a sale of the home. Scope is very limited on foreclosures and cancellation of debt in the VITA/TCE Program. Under the Mortgage Forgiveness Debt Relief Act of 2007, taxpayers may exclude certain debt forgiven on their principal residence. These rules are covered in a specialty course on Link & Learn Taxes for volunteers with an Advanced, Military, or International Certification. This specialty course on cancellation of debt is optional. Check with your Site Coordinator to determine if you should be certified in this topic.