Sold a rental property that qualifies for the 500K primary home exclusion

Forum|Forum|3 months ago
April 9, 2026
1 reply
71 views

Do I enter under Sale of Home or under the Rental Properties and Royalties or both?

We qualified for the exemption since we lived in the home for at least 24 months within the 5 years before the sale.

Bsch4477

Level 15

Not clear. If a rental property how does it qualify for primary residence exclusion?

karmic_caboodleAuthor

Level 2

We qualified for the exemption since we lived in the home for at least 24 months within the 5 years before the sale.

AmyC

Level 15

The IRS closed that loophole years ago and you must account for all the depreciation taken. As you go through the sale of main home screen, it will ask if it was ever used as a rental/ business purposes, answer yes.

See Publication 523, Selling Your Home - eligibility requirements show you as ineligible if You or your spouse (or former spouse) used the entire property as a vacation home or rental after 2008. See Business or Rental Use of Home.

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