contract means nothing. starting on the date you closed on the purchase and ending 5 years later which if you closed on the purchase on 12/10/19 the 5 years ends 12/09/2024. You can close on 12/10/2024 because the 5-year lookback period for ownership and occupancy starts the day before closing.
did you depreciate the property when it was a rental? if not, you may want the services of a tax pro because the law requires that you reduce the basis by the amount of the depreciation that should have been taken while it was a rental. any gain based on that reduced basis is subject to section 1250 recapture. the depreciation recapture applies before the home sale exclusion.
repairs do not add to your tax basis only improvements.
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there is no way to avoid the depreciation recapture and if you wait past the 5 year mark you lose the home sale exclusion. waiting until the last day to close is foolish. sometimes closing fails and then you would lose the $250k single or Married filing separately / $500K married filing jointly (assuming both meet the 2-year occupancy test) exclusion.
