@Catchasoundset wrote:
Thank you for the quick response! I understand the explanation. Curious what the "exclusion" percentage might be to make it worth the trouble to file for should I sell this year. Is that a Case by case amount as well? Can my CA realtor possibly help?
The partial exclusion is calculated on time. For example, if you lived in the home 14 months, your time percentage is 14/24 or 58.3%. That means you can exclude the first $250,000 x 58.3% = $145,833 of gain. Any gain over that is taxable. You can calculate the percentage by months or by days, if counting days gives you a higher percentage. The exclusion is based on whichever time is the shortest:
a. how long you owned the home
b. how long you lived in the home as your main home
c. how long since you last used the exclusion on the sale of a home.
For example, if you closed on the home on May 1, 2022, moved in on May 15, and closed on the sale of your previous home on May 25, 2022 (and used the exclusion), you would use May 25 as the starting date for calculating the exclusion percentage.
