| Taxpayers can exclude up to $500,000 (on a joint return) of gain from the sale of a principal residence. To qualify, the taxpayer must have used the residence as their principal residence for at least two of the last five years. |
Limit on Home Sale Exclusion |
Mortgage interest |
Joint tax filers can deduct all the interest on a maximum of $1 million in mortgage debts secured by a first and second home, plus the interest paid on a maximum $100,000 in home equity loans. |