All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Pioneer
Posts: 1
Registered: ‎12-04-2017

Homeowners exclusion - claiming after 2 years

I bought my current house on February 15, 2016.  I have lived there ever since and will have lived in the home for 2 full years on February 15, 2018.

I had sold my previous house on April 18, 2016.  I had owned and lived in that house for 5 years and sold it for a ~$60k gain.  I claimed the homeowners exclusion on my 2016 return. 

I plan to sell my current house and expect to realize a gain of ~$80k. To be able to claim the exclusion once again, I expect to wait to sell it until April 19, 2018.  I will have lived in the house for two years and also will not have used the homeowners exclusion in the previous two year period (for my previous home).

Is this correct?  Can I claim the exclusion once in 2016 and then again on my 2018 return?  Want to confirm that claiming the exclusion is based on 2x365 days vs. calendar year (ie, have to wait until January 1, 2019 to be able to claim the exclusion in 2016, not in 2017 and 2018, and then claim again in 2019).

Thanks

Valued Neighbor
Posts: 78
Registered: ‎02-28-2016

Re: Homeowners exclusion - claiming after 2 years

The current law is for two calendar years. However, you should keep a watchful eye on the GOP tax plan as the two years is proposed to become five years. It's not clear to me if this change (if passed) will apply to you in 2018 or you get a pass.

Tax Pro
Posts: 5,780
Registered: ‎02-23-2016

Re: Homeowners exclusion - claiming after 2 years

Hi di25bhc,

 

 

Welcome to the H&R Block community.

 

Assuming that you claimed the exclusion on your 2015 tax return that you filed in 2016, and that you lived in a house that you purchased in February of 2016, you will be able to claim the exclusion again on your 2018 tax return that you file in 2018.  In other words, you claimed it in 2015, so you can't claim in for 2016 or 2017.

 

However, as was previously mentioned, the tax bill may change the requirements for the exclusion to five years before tax year 2018 has a chance to begin.  The Senate passed its bill last week, but the full Congress still has to pass a single bill before anything becomes law so I'm watching and waiting for now.  If a new law is not passed by December 31st then 2019 returns and years thereafter will be affected unless the new law specifies that an item will take effect for 2018.

 

If you have any other questions I'll be glad to help.

 

Louis,

Senior Tax Advisor (Tampa, FL)