Bought a home in 2013, lived there until June 2021, then rented it. If sold in June 2025, does the 2 out of 5 year rule apply to avoid tax on $240K gain? Moved for job.

Forum|Forum|1 year ago
November 30, 2024
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Best answer by Bsch4477

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The exclusion is 250K.
You're eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale.

Since your testing period started in 2020 you only lived in it for one of the last 5 years. But if you had to sell because of a job move more than 50 miles away you are eligible for a partial exclusion.

Bsch4477

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sun1232Author

Level 2

Thanks for the reply.

can I use the money to buy a primary house where I live and get the full exclusion, can be this done after 5 years? I am a little confused about 1031 and how it works, could you explain? thanks in advance