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29732010
New Member

Can we use the $250000.00 exclusion because our daughter lived in the house rent free?

Can we use the $250000.00 exclusion of the capital gains  because our daughter lived in the house rent free.
2 Replies
tagteam
Level 15

Can we use the $250000.00 exclusion because our daughter lived in the house rent free?


@29732010 wrote:
Can we use the $250000.00 exclusion of the capital gains  because our daughter lived in the house rent free.

No. You have to use the home as your main home; having a family member use the home as just that family member's main home will not qualify for the exclusion.

 

See https://www.irs.gov/taxtopics/tc701

Irene2805
Expert Alumni

Can we use the $250000.00 exclusion because our daughter lived in the house rent free?

No - not if your daughter lived in the house without you.  For your sale to qualify for an exclusion of $250,000 gain ($500,000 if married filing jointly) you have to meet all of the following requirements:

  • You owned the home and used it as your main home during at least 2 of the last 5 years before the date of sale;
  • You didn’t acquire the home through a like-kind exchange (also known as a 1031 exchange), during the past 5 years; AND
  • You didn’t claim any exclusion for the sale of a home that occurred during a 2-year period ending on the date of the sale of the home (the one you want to exclude from).
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