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Selling a rental property converted from primary residence with capital gains
I bought a home in 1990 for 80k, remodeled it in 2003, moved out of state and rented it out for ❤️ years then sold it for 290k. I have lived in it as a primary residence for 2 of the last 5 years, but the last almost 3 years it was a rental.
Is there a way to avoid capital gains tax? I calculate gains to be about 110k.
I had it in TurboTax as rental property and am trying to sort through it in TurboTax.
Thanks
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June 7, 2019
5:21 PM
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Investors & landlords
If you qualify for the exclusion to make all of your profit tax-free, don't report the home sale. But make sure all your paperwork is in order to show the IRS if it asks.
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June 7, 2019
5:21 PM
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Investors & landlords
The IRS has a provision that can help homeowners avoid capital gains on the sale of their primary residence.
To qualify,
- You must have owned your home and used it as your main residence for at least two years in the five-year period before you sell it.
- You also must not have excluded another home from capital gains in the two-year period before the home sale.
- If you meet those rules, you can exclude up to $250,000 in gains from a home sale if you’re single and up to $500,000 if you’re married filing jointly.
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June 7, 2019
5:21 PM
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That is what I thought, but how do I enter it in TurboTax premier. I followed instructions in this forum (add the house under rental assets) and it says I owe capital gains tax. before selling it in 2018 it was a rental. thanks.
June 7, 2019
5:21 PM