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Investors & landlords
Have you been on "qualified extended duty" the entire time? If so, you are right, you qualify for the home exclusion. When you are selling the "asset" in the rental section, it should also ask you if it was your Principal Residence. When you get there, just tell the program you lived there for the 2-out-of-5 years. There is no need to note the "qualified extended duty" exception.
If you were not on "qualified extended duty" the entire time, you don't automatically get 15 years. It is 5 years PLUS the number of years you were on "qualified extended duty" (up to a maximum of 10 years, for a total of a 15 year period).
However, you will still owe tax on the gain due to depreciation. That does not qualify to be excluded.
‎February 8, 2023
12:10 PM