3 replies to this topic

[boethius]

Hi, I'm about to sell a home which I purchased Jun 30, 2010, and it's closing escrow Jun 8, 2015.  This will be just shy of 5 years of ownership.  I've lived in it all of that time and have not rented it out.

 

On the IRS website, and elsewhere, all I can find is a general rule that you must have lived in the house 2 of the last 5 years of ownership to qualify for exemption from taxes for gains up to $250K for single and $500K for married. 

 

But what if you're just 22 days shy of 5 years of ownership?  What happens then? 

 

One of the reasons I am selling is because I have a family member who is elderly and was in treatment for a serious health issue, stabilized for now but moving closer to work will enable me to go home and to provide care if/when needed going forward.. it was not feasible to do that with 40 minute commutes necessary from where I currently live.

 

Does anyone have familiarity with the tax law here for this particular scenario?

[FolsomEJ]

2 years is fine.

 

It means you can't live in it 10 years, move out and rent it out for 5 years and then sell without paying on the gains.

 

You meet the 2 year test, and you have not (and won't) be out of it for 3 years before the sale.

[boethius]

Thanks for the clarification.  It's a relief to me.

[aztransplant]

This seems to be a pretty good/comprehensive explanation and might even influence your decision about whether to convert to a secondary home rental down the line:

http://www.bankrate....al-gains-1.aspx