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Question

2017 sold my wife's home. a pop up said that I may have a tax issue if I were to sell my current home within a 2 or 3 yrs. Where can I find out this information?

Forum|Forum|7 years ago
June 1, 2019
1 reply
8 views

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TurboTax Premier Online

Level 11

That's the "2 of last 5" capital gains tax exclusion rule.

Basically, if you lived in the house for at least 2 of the last 5 years you owned it as your primary residence, counting back from the date of the sale, then the first $250,000 of gain is exempt from federal taxation. If filing a joint return and both tax filers meet the "2 of last 5" rule, then the first $500,000 of gain is tax deductible.

When you do this, then you have to wait "at least" 2 years to sell another qualifying house to get the exclusion again.