Hello all,
We purchased a new home, a primary residence, and lived there for one year. At the end of that year we purchased another home, moved in, and rented the primary residence for almost 2 years. During this time we occasionally lived in the new home and about half or more of the time we had both homes rented and were traveling or working in other cities.
We then came back to the primary residence and will have 2 out of 5 years but I am seeing mixed things about whether some of these rented days will turn this into a prorated exclusion of our 500k (married filed jointly) exemption. Even the IRS Publication 523 makes zero mention of this kind of example or situation, and it seems to possibly only apply if you buy a property as an investment and then later try to convert it to a primary. Is this a cut and dry situation?
Follow up, is there any way to fix it if i did create a problem? Seems like worst case I'm prorating rented vs. used days vs. the 500k exception, but I feel like the IRS is telling me I'm good for the whole thing. Thanks in advance!
