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.
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).