I have a scenario I'd like to get some clarity on if you'd permit:
My wife and I bought a house in CT on June 7, 2019 for $160k, then in August 2020 we had to move to NJ for new jobs. We figured it was too early to sell after 1 year, so we rented it out instead. We rented it out from August 1, 2020 to July 23, 2021 - which was the day it was sold. We lived in it for a total of just under 14 months, and rented it out for just under 12. (Sale price was $180k if relevant).
After renting it out - in 2020 - we purchased another house in NJ. We sold the CT house in 2021 because of the provision that allows us to move more than 50 miles without incurring capital gains taxes. I am worried though that because we bought another home that we lived in concurrent to renting out the CT home, the CT home would be considered a rental business (or at least not a main home) and would be subject to capital gains. Can anybody shed some light on this for me please?
Thanks
