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
Alumni Associate
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)