If you sold your Fremont home and made a profit, you may be able to exclude that profit from your taxable income. Here's how it works.

$250,000 Exclusion on the Sale of a Main Fremont Home

Individuals can exclude up to $250,000 in profit from the sale of their Fremont home (or $500,000 for a married couple) as long as you have owned the home and lived in the home for a minimum of two years. Here is the good news those two years do not need to be consecutive. Actually in the 5 years prior to the sale of your Fremont home, you will have needed to have lived in the house for a minimum of 24 months over that 5-year period. In other words, the home must have been your principal residence for 24 months of the last 60 months.

You can use this 2-out-of-5 year rule to exclude your profits each time you sell or exchange your main Fremont home. Generally, you can claim the exclusion only once every two years. Some exceptions do apply.

Exceptions to the 2 out of 5 Year Rule

If you lived in your Fremont home less than 24 months, you may be able to exclude a portion of the gain. Exceptions are allowed if you sold your house because the location of your job changed, because of health concerns, or for some other unforeseen circumstance.

Change in the Location of Your Job

If you lived in your house for less than two years, you can exclude a part of your gain on the sale of your house if your work location has changed. This exception would apply if you started a new job, or if you are moved to a new location with your employer.

Health Concerns

If you are selling your house for medical or health reasons, be ready to document those reasons with a letter from your physician. Such a letter does not need to be filed with your tax return. Instead, keep the documentation in your personal records just in case the IRS wants further information.

Unforeseen Circumstances

If you are selling your house because of unforeseen circumstances, be ready to document what those reasons are. Unforeseen circumstances are defined as: the occurrence of an event that you could not reasonably have anticipated before buying and occupying your main home. Some specific examples of unforeseen circumstances may include:

• natural disasters,
• acts of war,
• acts of terrorism,
• change in employment or unemployment that left you unable to meet basic living expenses,
• death,
• divorce,
• separation, or
• multiple births from the same pregnancy.

Partial Exclusion

You may also be able to exclude a portion of your gain if you are selling your Fremont home and have lived there less than 2 years and you meet one of the three exceptions.(Change of job, Health concerns, Unforeseen circumstances)  You calculate your partial exclusion based on the amount of time you actually lived in your Fremont home.

Thank you for taking the time to read the information I have made available to you. This information is brought to you by your Fremont real estate expert Clyde Brown.  If you are considering buying or selling property, planning to relocate, looking for Fremont homes for sale, or looking for any other information about real estate in the Fremont real estate market, or the surrounding areas, please visit the most complete website dedicated to everything real estate related www.ClydeBrownHomes.com.

If you or someone you know are in need of a competent and experienced Bay Area Realtor, or have real estate or mortgage related questions, please feel free to contact me I will be more than glad to answer your questions. Call me at 800-839-0665 or email me at Clyde@ClydeBrownHomes.com. For all your East Bay cities needs including Fremont, Newark, Union City, Hayward, Oakland, Santa Clara, Milpitas, Dublin, Livermore, Pleasanton, and San Ramon. Clyde Brown Legacy Real Estate & Associates.