I sold primary residence in April 2016 due to military orders and took the capital gains exemption on 2016 tax return. I want to sell a rental property that I bought in 2004 and lived in until 2009, then rented out until 2017. All of my time away was under military orders. I qualify for the stop clock military exception for the 2 in 5 years test. However, I do not meet the look back test since I claimed a capital gains exemption on sale of home less than two years ago. Can I still use the military stop clock exception to claim capital gains exemption on 2017 tax return?
To qualify for the exclusion, you need to meet two tests. Due to the military, you meet the 2 out of 5 (modified) test, but you do not meet the test that you can only exclude one home every 2 years. Sorry.