You must pay tax on the taxable amount of the gain plus interest calculated from the due date of the return you are amending. If you or your spouse are age 55 or older on the date of the sale, you may qualify to exclude some or all taxable gain. Refer to Topic 703 for information about this exclusion. The exclusion is allowed each time you sell or exchange your main home, but generally no more frequently than once every two years. To be eligible, the main home must have been owned and used as your main home for a combined period of at least two years out of the five years prior to the sale or exchange.
Special rules apply for partial exclusion, depreciation and other situations.
The new exclusion replaces the postponement and one time exclusion provisions for sales after May 6, 1997.