My husband and I bought a townhouse in 2013. We lived there 2013-2017. In June 2017 we bought a new house and rented this townhouse out. Since June 2017 the unit is a rental property.
If I sell the unit now, there will be a capital gain. Should the sale be considered as “main home” and thus qualify for the 500k capital gain tax exemption, or “rental property” without any tax exemption? IRS specifies the property has to be a “main home” with 2 year of primary residence out of 5 years in order to qualify for the exemption. But isn’t my unit a rental property? Is it correct to claim the sale as main home sale?
If the sale is considered “main home” sale, do we get 100% of the exemption (not just a percentage of it based on the number of days as primary residence)?
