Scenario
The sale is complete, but your tax responsibilities linger. The title company reports the real estate transaction to the IRS using a Form 1099-S. If this home was your primary residence for 2 out of the last 5 years, you can legally exclude up to $250,000 (single) or $500,000 (married) of capital gains from your income taxes. Retain your final closing statement to defend this position during tax season.