When does the 2-year window kick in for conversion of short term capital gains to long term capital gains?
The 2-year windows has nothing to do with the type of gain - be it long term or short term.
Completion date of the build really has nothing to do with this. If you lived in the house as your primary residence for at least 2 years (730 days) of the last 5 years you owned it, then you can exclude up to $250,000 from taxable income if filing single or $500,000 if filing joint and you both lived in the property as your primary residence for the 730 days. The day count starts the first day/night you move in/begin sleeping in the house.
In your case, since you had to move for a new job before living in the house the full 730 days, that's one of the allowed exceptions. You will get a pro-rated amount to exempt, based on the time the house was your primary residence.
Short term gain - when you sell the property and you owned it less than one year. This has nothing to do with the time you lived in the property. It has everything to do with the period of time you owned it.
Long term gain - if you owned the property for more than one year.
Both short term and long term are determined by counting back from the closing date that you sell the property. Again, neither short or long term gain has nothing to do with how long you lived in the house. It has everything to do with how long you owned it.
Don't know if this will affect you or not. But be aware that it's perfectly possible for the land to be long term gain, and the house to be short term gain. Your original closing date on the land is easy, as that's the date you closed on the purchase of that land.
What I'm not sure of, is the ownership start date for the house. I would expect that date to be the date your construction loan was converted to a mortgage, or the closing date of the mortgage on the structure if you used a separate mortgage to pay off the construction loan. Others reading this will need to confirm this.
