My wife and I were married in 2019.We sold the her home in 2020. The profit was $25,000. Do we have to report?

It depends. The sale is probably not taxable, but the IRS sometimes sends audit notices to taxpayers who sell their homes and do not report the sale. That means filing an amended return to show the IRS you owe no tax.

The IRS allows you to exclude up to $250,000 of gain ($500,000 if married filing jointly) from the sale of your main home if you owned and lived there for two out of the last five years leading up to the date of sale (date of the closing). For a married couple filing jointly, only one spouse has to meet the ownership requirement.

Publication 523 (2019), Selling Your Home

To report the sale of your home:

1. Type home sale in search in the upper right
2. Select Jump to home sale
3. Fill in your info. VERY IMPORTANT. Click YES to "Did you receive a Form 1099-S that reported this sale?" even if you did not. Clicking YES will report a non-taxable sale on your tax forms.