Military Capital Gains Extension

[eji]

Greetings!

I’m an active duty military member who bought a house in San Antonio in 2008.  We lived in it until 2012 when we got orders to Florida but kept it as a rental.  Fast forward to 2019 – we actually got orders back to San Antonio and bought another house. There was a tenant in the rental, and they moved out in August 2020.  We then sold it in November.  What does this mean for my capital gains? As a military member, would I still qualify for the ten year extension even though I moved back to San Antonio?  Whatever the answer might be, do the TurboTax algorithms account for this when I file?

Thank you!

Eric

[Critter-3]

Here is the third book you need by your bedside ... the IRS pub 3.  Read the rules starting on page 17 and follow the program screen instructions carefully to get the personal residence exclusion if you are eligible.  If you are having trouble then upgrade to the LIVE option or seek local professional assistance for this year's return ... see if the JAG office has tax prep help.

https://www.irs.gov/pub/irs-pdf/p3.pdf

[eji]

Thanks so much for the reply.  I'm definitely tracking. Normally this would be simple in that I definitely qualify because the military moved me away. My case is more complicated in that the military moved me back to this location again many years later, and a tenant was in the property.  I then sold the property after the tenant moved out. 

Also, does TurboTax provide an option somewhere during filing to claim this capital gains extension/exemption for military?

[Critter-3]

The program does if you pay attention however you will use the home sale section and recapture the depreciation taken  ... do not sell it using the rental section. 

[eji]

Copy. Thank you so much for the super speedy reply!  So does that mean I would use rental section for all my expenses (repairs, taxes, insurance, etc.), but then use the personal residence home sale section to sell? It will let me split up the same property like that?  If I sell like a normal personal residence, I have to recapture the years of depreciation I've taken?  I thought not doing having to do that was one of the benefits of the military extension. Do I have that incorrect?

Thank you again. Really appreciate the vector.
Eric

[Critter-3]

If it was a rental at any time in 2020 then you really need to seek professional assistance if you get lost ... you will have to take the rental out of service and then use the sale of personal residence section but only after you have the required depreciation information so you have to do a bit of flip flopping.  The program will not automatially do this for you in your situation.  

[eji]

Understood. Thanks again!