Question:   I sold my principal residence this year. What form do I need to file?

Answer:   You may be entitled to exclude from income all or part of any gain from the sale of your main home if during the 5-year period ending on the date of the sale you meet the ownership and use tests described below and in Publication 523, Selling Your Home.

• You owned the property for at least 2 years; the 2- year period need not be continuous (the ownership test).
• You must have lived in the property as your principal residence for at least 2 years; the 2- year period need not be continuous (the use test).
• During the 2-year period ending on the date of sale, you did not exclude gain from the sale of another principal residence.
• If you owned and lived in the property as your principal residence  for less than 2 years, you may still be able to claim a reduced exclusion. See Publication 523, Selling Your Home, for more information.

If you are required to report or choose to report a gain on the sale of your principal residence, use  Form  1040, Schedule D, Capital Gains and Losses.

NOTE:  If you (or your spouse) were on qualified official extended duty as a member of  the U.S. Armed Services or U.S. Foreign Service, as an employee of the intelligence community, or as an employee or volunteer of the Peace Corps, you may elect to suspend the five-year test period for up to 10 years. You may use this provision for only one property at a time.  Qualified official extended duty is any extended duty  while serving  at a duty station at least 50 miles from  the property or while  residing  under Government orders in Government   quarters. Extended duty is any period of active duty following a call or order to duty,  if the duty lasts for more than 90 days or for an indefinite period.