August 6, 2012
Selling a home can mean the result of a capital gain or loss. Capital gains can be excluded from taxable income if you have owned and lived in the house the entire time period. $250k excluded from gain if filing status is single and $500k excluded from gain if filing status is married. If you can exclude all of the gain, it is not necessary to report on schedule D.
If at any period of time this house was rented within 2 of the last 5 years that you have owned the property, other calculations must be considered before determining how much of the gain is possibly excluded.
See Publication 523 for further information.