I would like to know if I qualify for fully or at a prorated rate for the exclusion for the home capital gain of a property that was given to me as a gift?
The history of the house looks like this, and the tax (related to the real estate tax or rental income) was never filed under my name :
2010 - I purchased the property with my sister; I paid full in cash and the property started being used as a rental; the property value was ~$200k
2012 - My name was removed from title upon mutual agreement (the property was still used for rental) \
2013 - The property was put under title of my sister's LLC
2021 - The property was given back to me as a gift (no monetary exchange at all); the property value is now expected to be ~$500k.
I am thinking of living in that property as a primary residence for the next few years. If I live more than two years, will I qualify for the full amount of tax exclusion for home capital gain ($250k per person), or will it be prorated (i.e., for example, if I live there for 2 years, the tax exclusion applies at (2/11) 2 years out of 11 years of $250k)?
