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For the capital gains exclusion the seller must have owned the home and used it as their principal residence for two out of the last five years (up to the date of closing). The two years do not have to be consecutive to qualify. However if you have any capital losses those can offset capital gains.
Any capital gains on a residential property that was not used as your primary residence or as a rental will be taxed as long term gains if you owned the property for 1 year or longer. There is no offset for the gains.
To enter an investment sale -
Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Under Investment Income
On Stocks, Cryptocurrency, Mutual Funds, Bonds, Other, click the start or update button
Or enter investment sales in the Search box located in the upper right of the program screen. Click on Jump to investment sales
There are no special rules to offset capital gains on the sale of a home that was not your own personal residence. There is the general rule that if you have investments with a loss (stocks that have gone down, etc.), sometimes it can be a good idea to sell them to realize the loss against the gain, but that depends on the investment and your overall investment strategy.
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