DavidD66
Expert Alumni

Investors & landlords

You will have to pay capital gains tax on property A, as it does not qualify as your primary residence.  And since it was a rental property, you will have to pay depreciation recapture (to the extent you have a gain) on the amount of depreciation you were entitled to take while it was a rental.  For property B, as long as  you lived in it as your primary residence for 24 of the 60 months immediately preceding the sale of the property, you can exclude $250,000 ($500,000 if Married Filing Joint) of gain on the sale of the property.

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