My wife and I live in a home that we rent from Home Partners of America. They purchased the home for $530k in Nov 2020. We are considering moving at the end of this year's cycle, and exercising the option to purchase, which was pre-established when we moved in at $600k. The home is currently valued at $680k and is likely to be well over $700k in Nov.
Our plan is the purchase the home from Home Partners and immediately sell it, possibly in a single transaction. We will have lived in the home as our primary residence, paying rent, for 2 years, but we would have only owned the home for 30 seconds. Will we owe capital gains tax on the sale?
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it would appear so. you don't meet the 2-year ownership test.
Yes, you will still owe capital gains. The rule is that you must own the house and occupy it for 2 out of the last 5 years. If you own it for 30 seconds, you would not meet the ownership test so you would not be able to use the home sale exclusion.
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