[dmacc]

I sold my house in 2007. How do I file my 2007 federal income tax.

[MukatA]

You can exclude up to $250,000 of the gain on the sale of your main home if the following are true.
1. During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home.
2. During the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years and Lived in the home as your main home for at least 2 years

If you can exclude the profit, then you don't need to report the sale. Also, if you had a loss, you can't deduct the loss unless it is an investment property.

[ebaines]

File your 1040 as normal. If you qualify for the $250K exclusion on gain as described by MukatA, you don't need to report anything at all. If you don't qualify for the exclusion, or if your gain exceeds $250K, report the sale on Schedule D. See tax publication 523 for details:
Publication 523 (2007), Selling Your Home

[AtlantaTaxExpert]

Both ebaines and MukatA are correct.

This was an issue of some controversy since the exemption law was passed in 1997. However, in 2003, the IRS announced that NO reporting is required unless you do NOT meet the exemption requirements.