How to Fill Out Form 8949 for a Home Sale and Schedule D

To report a home sale on Form 8949, enter the transaction as a single long-term row in Part II with Box F checked, put the gross sales price in column (d) and your adjusted basis in column (e), then use Code H in column (f) and a negative number in column (g) equal to your selling expenses plus the Section 121 exclusion you’re claiming. Column (h) is column (d) minus column (e) plus column (g), and for most sellers it comes out to zero. Here’s how to fill out Form 8949 for a home sale line by line, including the pieces that trip people up: which box to check, how to combine selling expenses with the exclusion in a single adjustment, and when the sale doesn’t belong on Form 8949 at all.

Do You Need to File Form 8949 for This Sale

You only need Form 8949 for a home sale if one of three things is true: your gain exceeds the Section 121 exclusion, you received a Form 1099-S from the closing agent, or you’re electing to report the gain even though you could exclude it.¹ If your entire gain is excludable and no 1099-S was issued, skip Form 8949 and Schedule D entirely.

The 1099-S is the usual trigger. Closing agents file it with the IRS and give you a copy, so the IRS is expecting the sale to appear on your return.² Even when the exclusion wipes out your gain, receiving a 1099-S means you file Form 8949 to show the IRS the math behind the zero.

Numbers to Have in Front of You

Before opening the form, pull these together:

Your gross sales price from the current Closing Disclosure (or the 1099-S).
Your adjusted basis: original purchase price, plus qualifying settlement fees from the purchase (title insurance, recording fees, transfer taxes, legal fees, survey costs), plus the cost of capital improvements. Loan-related charges like points, mortgage insurance premiums, and lender-required appraisal fees don’t count toward basis. Capital improvements are permanent additions that increase value, extend useful life, or adapt the home to a new use — routine repairs don’t qualify.³
Your selling expenses: real estate commissions, advertising, legal fees connected to the sale, and any loan charges you paid on behalf of the buyer.¹
Your Section 121 exclusion amount: up to $250,000 of gain, or up to $500,000 for joint filers where at least one spouse meets the ownership test and both meet the use test. You qualify if you owned and used the home as your main residence for at least two years (24 months, not necessarily consecutive) during the five years ending on the sale date, and haven’t claimed the exclusion on another sale in the prior two years.⁴⁵

Which Part and Which Box

Form 8949 has two parts. Part I is for property held one year or less; Part II is for property held more than a year. Nearly every home sale goes in Part II.⁶

Each part has three boxes at the top, and they refer to Form 1099-B, which is what brokerages issue for securities. Home sales are reported on a 1099-S, not a 1099-B, so the correct box for most sellers is the one for transactions not reported on 1099-B:⁷

Box F (Part II) or Box C (Part I): no 1099-B was received. This is the right box for almost every home sale, whether or not you got a 1099-S.
Box D or Box A: 1099-B received, basis reported to the IRS. Rare for real estate.
Box E or Box B: 1099-B received, basis not reported to the IRS.

A typical seller who owned the home more than a year and received a 1099-S uses Part II, Box F.

Filling In Each Column

Each transaction is one row. For a home sale:

Column (a) — Description of property. The street address is fine.
Column (b) — Date acquired. The date you originally bought the home, in month/day/year format.
Column (c) — Date sold. The closing date.
Column (d) — Proceeds. The gross sales price. If you received a 1099-S, this should match it. Don’t net out selling expenses here.
Column (e) — Cost or other basis. Your adjusted basis.⁷
Column (f) — Code(s). Enter H for the Section 121 exclusion. If you’re also using column (g) for selling expenses, combine codes alphabetically as EH.
Column (g) — Amount of adjustment. Enter the combined adjustment as a negative number (in parentheses). This is your selling expenses plus your exclusion amount.⁷
Column (h) — Gain or loss. Column (d) minus column (e), plus column (g). If the exclusion covers everything, this is zero.

A Worked Example

You bought the home for $200,000, spent $30,000 on qualifying improvements over the years, and sold it for $420,000 with $25,000 in selling expenses. Adjusted basis is $230,000. On Form 8949, Part II, Box F, one row:

Column (d): $420,000
Column (e): $230,000
Preliminary gain: $190,000 — below the $250,000 exclusion
Column (f): H (or EH if you’re also treating the $25,000 selling expenses as an adjustment here rather than reducing proceeds)
Column (g): ($215,000) — the $190,000 gain plus $25,000 selling expenses
Column (h): $0

If You Sold at a Loss

A loss on a personal residence is not deductible. Usually you don’t report it at all. But if you received a 1099-S, the IRS has a record of the sale and expects to see it, so you report the transaction and then zero the loss out. Fill in the row normally, put Code L in column (f), and enter the loss amount as a positive number in column (g). The positive adjustment cancels the loss and column (h) comes out to zero.⁷

Partial Exclusion When You Didn’t Reach Two Years

If you sold before hitting the two-year ownership or use mark, you may still get a prorated exclusion when the sale was primarily driven by a workplace change (new job at least 50 miles farther from the home than the old one), health reasons, or an unforeseeable event such as divorce, death, job loss, condemnation, destruction of the home, or multiples from a single pregnancy.¹ The exclusion is scaled to the fraction of 24 months you completed — 15 months of use gives you 15/24 of the $250,000 or $500,000 cap.

On the form, this looks the same as a full exclusion: Code H in column (f), and the prorated exclusion (plus any selling expenses) as a negative number in column (g).

Home Office or Rental Use Changes the Answer

If you claimed depreciation deductions on any part of the home (a home office, a rented room, a converted basement), the Section 121 exclusion does not cover the gain tied to that depreciation. Depreciation taken after May 6, 1997, is recaptured as ordinary income at a maximum rate of 25%, and that portion of the gain goes on Form 4797, not Form 8949.⁸ The remaining gain can still qualify for the Section 121 exclusion on Form 8949 if you meet the ownership and use tests. If you never claimed depreciation on the home, this doesn’t apply.

Where the Totals Go

Once the row is complete, total columns (d), (e), (g), and (h) at the bottom of Part II. Those totals carry to the long-term section (second page) of Schedule D (Form 1040). Short-term totals from Part I go to the first page. Schedule D then combines the home sale figures with any other capital gains and losses for the year.⁷ When column (h) is zero, the transfer doesn’t change your tax; it just shows the IRS why nothing is owed on a sale it already has a record of.

Always download the version of Form 8949 for the tax year of the sale, not the year you’re filing in.

1
Internal Revenue Service. Publication 523 (2025), Selling Your Home
2
Internal Revenue Service. Instructions for Form 1099-S (Rev. April 2025)
3
Internal Revenue Service. Publication 551, Basis of Assets
4
Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence
5
Internal Revenue Service. Sale of Residence – Real Estate Tax Tips
6
Internal Revenue Service. Form 8949, Sales and Other Dispositions of Capital Assets
7
Internal Revenue Service. Instructions for Form 8949 (2025)
8
Internal Revenue Service. Instructions for Form 4797