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Can I not include sale of house in income as over 65 and was primary residence until 4 years ago. son lived there rent free to keep house from setting empty until sold?

 
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JulieR
Expert Alumni

Can I not include sale of house in income as over 65 and was primary residence until 4 years ago. son lived there rent free to keep house from setting empty until sold?

It depends. You are allowed to exclude the gain on the sale of your home if: 

  • You lived in the home as your main home for at 2 of the 5 years preceding the sale.
  • Your "net" profit from the sale is less than $250,000 ($500,000 if Married Filing Jointly).
  • You didn't take depreciation deduction on the home or use it for business during the time you owned it.
  • You didn't rent it out at any time that you owned it.
  • You didn’t receive a Form 1099-S.

Based on what you describe, you have not satisfied the residence requirement (your main home for at 2 of the 5 years preceding the sale), you may still qualify for a partial-exclusion if the main reason for your home sale was a change in workplace location, a health issue, or an unforeseeable event.  

For more information see the following IRS Publication. https://www.irs.gov/publications/p523#en_US_2018_publink100073096

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2 Replies
jtax
Level 10

Can I not include sale of house in income as over 65 and was primary residence until 4 years ago. son lived there rent free to keep house from setting empty until sold?

Do you mean "include" or "exclude?"
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JulieR
Expert Alumni

Can I not include sale of house in income as over 65 and was primary residence until 4 years ago. son lived there rent free to keep house from setting empty until sold?

It depends. You are allowed to exclude the gain on the sale of your home if: 

  • You lived in the home as your main home for at 2 of the 5 years preceding the sale.
  • Your "net" profit from the sale is less than $250,000 ($500,000 if Married Filing Jointly).
  • You didn't take depreciation deduction on the home or use it for business during the time you owned it.
  • You didn't rent it out at any time that you owned it.
  • You didn’t receive a Form 1099-S.

Based on what you describe, you have not satisfied the residence requirement (your main home for at 2 of the 5 years preceding the sale), you may still qualify for a partial-exclusion if the main reason for your home sale was a change in workplace location, a health issue, or an unforeseeable event.  

For more information see the following IRS Publication. https://www.irs.gov/publications/p523#en_US_2018_publink100073096

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