No. of Recommendations: 2
You report the gain on Sch D just like a stock transaction.

If you meet the requirements for the exemption, you also claim it on Sch D. Generally the requirement is you owned the property for at least five years and lived in it for two of those years. You get a $250K exemption if single, or $500K if married.

And if your gain exceeds the exemption, you can adjust your cost basis to include the cost of improvements over the years following the same rules as before. Improvements are deductible but not repairs/maintenance.

There's an IRS publication available on the irs.gov website that provides details for all of this.
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