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posted Jun 4, 2019 4:15:06 PM

I lived in a house for 6 years, I then moved out and rented it for 3 years (Jan 1 2016 - dec 31 2018) if I sell the house next few months do I have to pay capital gains ?

The house was rented for exactly 3 years and now I’m trying to decide if I should continue renting or sell but I’m trying to avoid paying capital gain taxes 

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Level 15
Jun 4, 2019 4:15:08 PM

Yes. You missed the window to sell the home and get the principal residence sale exclusion. You had to have sold it by 12-31-18.  The rule is that you must have lived in the home for at least 2 of the 5 years prior to sale. 

You could back in for 2 years and that would reduce the taxable capital gain, not eliminate it (the rules are different depending on whether you lived in it before or after renting it)

1 Replies
Level 15
Jun 4, 2019 4:15:08 PM

Yes. You missed the window to sell the home and get the principal residence sale exclusion. You had to have sold it by 12-31-18.  The rule is that you must have lived in the home for at least 2 of the 5 years prior to sale. 

You could back in for 2 years and that would reduce the taxable capital gain, not eliminate it (the rules are different depending on whether you lived in it before or after renting it)