Your Life

Your Life

Major life milestones often have a major tax impact. Changes in your marital status, having a baby or adopting a child can have significant impact on your taxes. This is the place to ask questions about dependents, real estate, and other various scenarios that play a significant role in what taxes you pay.

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Pioneer
Posts: 1
Registered: ‎02-07-2017

Home sale question

Hello,

 

We are selling our house...we have lived in the home 4 years.  I'm just a little confused when it comes to capital gains.  It says you have to live in the house for 2 of the past "5" years.  We have met the 2, is that all that matters?  I'm asking because we will make some money on the sale. 

 

Thanks.  

Highlighted
Associate (Council Member)
Posts: 1,925
Registered: ‎12-13-2013

Re: Home sale question

Hello pdehn3. Welcome to The Community.

Yes. If you have lived in (and owned) your home for at least 2 of the last 5 years as of the date of sale, you would qualify for the maximum exclusion amount of any capital gains ($250,000 for Single or $500,000 for Married Filing Joint). If you had used any portion of the property for business (such as an office in home) or rented any portion to tenant(s) within that 5 year period, you would still be likely able to exclude a portion of any capital gains, but the amount would be figured by using a proration formula.

I hope this helps to answer your question. Good luck to you.
WillMc1
Tax Professional (Retired)