Capital Gain Exemption for Military Veteran

[sjosh]

Hello, 

First off, thank you for your time and respond. I'm wondering if I would receive some portions of capital gain exclusion due to my military status in the past.  As far as I'm tracking, there is a vague IRS regulation regarding the military veterans in terms of capital gain exclusion. 

When I was in the military, I purchased my property in May 2012 and lived until July 2015. I got out of the active duty in March 2018. It was my rental property until I sold that property in April 2022.  

There was about $60K of capital gain. Are there any experts to provide some clear insights?

Thank you for your help. 

Sincerely, 

Josh

[ShirlynW]

No there is not a capital gain exemption in your case. The eligibility requirements for tax exclusion requirements are: 

1. You must have owned the home for the last two out of five years before the closing date of the home sale. If you’re married and filing jointly, only one of you has to meet this requirement.
2. You owned the home and used it as your primary residence for the last two out of five years prior to the home sale both spouses must meet this requirement if you’re filing jointly.

There are special exemptions, if you don't meet the residency requirement. However, the property must still be your primary residence and not rental property as you have stated.

Thank you for your service.

[sjosh]

I appreciate your time and reply!