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Does the law require withholding on the sale of a principal residence?

April 26, 2017Law Principal require Residence sale withholding

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Does the law require withholding on the sale of a principal residence?

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Yes, but only on the amount of taxable gain that exceeds the federal exclusion amount, if you qualify. For joint filers, the exclusion is $500,000. For all others, it is $250,000. See the instructions for Form WC. You can refer to IRS Publication 523 for more information about the exclusion, or contact your tax professional or the IRS if you have questions.