Capital Gains on Principal Residence Sale

[Kyles7777]

My wife and I built a home 3 years ago which was our principal residence and we sold it a year after due to it being a bit to small for our liking. We moved in with our in-laws and built a new home which we moved into a few months ago which is now our principal residence. We sort of settled on the property as there wasn’t much around and we don’t want it to be our forever home so I’d just like to know how long we should keep this home before selling in order to be certain we won’t pay capital gains. If a property comes up that we absolutely love I just don’t want to miss out on it so I am just curious what I should do.

[ColeenD3]

In order to exlude the capital gain on the sale of your primary home, you must meet the following qualifications. Moving because your home is too small is not a situation which triggers the partial exclusion.

Does Your Home Sale Qualify for Maximum Exclusion

The tax code recognizes the importance of home ownership by providing certain tax breaks when you sell your home. To qualify for these breaks, your home must meet the Eligibility Test .

How your sale qualifies.   Your sale qualifies for exclusion of $250,000 gain ($500,000 if married filing jointly) if all of the following requirements are met.

• 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.
• 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 gain from which you now want to exclude.

[Kyles7777]

Sorry I’m also in Ontario, Canada. I’m sure rules are a touch different.

[DoninGA]

---

@Kyles7777 wrote:

Sorry I’m also in Ontario, Canada. I’m sure rules are a touch different.

---

Are you completing a Canadian tax return or a US tax return?

If Canadian go to this TurboTax Canada website - https://turbotax.community.intuit.ca/community/turbotax-support/help/03/en-ca

If a US tax return then the rules apply even to a foreign primary residence.