capital gains tax

Forum|Forum|22 days ago
September 20, 2026
5 replies
32 views

Question on capital gains tax:

Hello,

I’m looking for guidance on whether I would qualify for the $250,000 capital gains exclusion when I sell my home.

I purchased and moved into the property in June 2020 and treated it as my primary residence. In October 2022, I temporarily left the property for what I expected to only be two months due to a health issue. After that, my health circumstances resulted in my temporary absence being extended and I was ultimately unable to return to my home until November 2023.

During the time I was away, I continued to consider the property my primary residence and maintained significant ties to it. For example, I continued paying the property taxes and household bills, maintained the property (including hiring people to maintain the lawn), and kept my voter registration and other records associated with the property. I continued to regard it as my home even though I was physically absent for health-related reasons.

After returning in November 2023 for short period, I went back to staying with my mom, because of my health circumstances, I would remain with her on a longer-term basis.

I am now considering selling the property in November 2026.

My main question is: Would I still potentially qualify for the $250,000 Section 121 capital gains exclusion, given that the property was my primary residence through November 2023, even though I had periods of physical absence from the property beginning in October 2022 due to health-related circumstances?

M-MTax

Level 15

You can potentially qualify for a capital gains tax exclusion, but whether you qualify for the full $250,000 exclusion or a prorated partial exclusion depends on how the IRS views your period of medical absence.

To claim the full exclsuion, you must satisfy the ownership and use tests, meaning you must have owned and used the property as your primary residence for at least 24 months (2 years) out of the 5 years prior to the sale date. For a sale planned in November 2026, your 5-year lookback window begins in November 2021.

Your Qualified Use: November 2021 to November 2023 covers exactly 24 months of qualified primary residence use within your 5-year lookback window.

M-MTax

Level 15

The IRS permits "short temporary absences" (such as vacations or temporary medical care) to count as time lived in the home, even if you rent the property out during that period. Because you expected to return within two months, maintained all physical and legal ties (voter registration, property taxes, household bills), and did briefly return in November 2023, you have a strong argument that October 2022 to November 2023 was a temporary medical absence.

If this temporary absence is accepted by the IRS, you meet the 2-out-of-5-year rule perfectly and qualify for the full $250,000 exclusion.

user17577323767Author

Level 2

Do you think it’s likely the IRS would have it qualify, even through it was intended to be short term but kept getting pushed back for treatment which then ended up being over a year. I saw where they say a 1 year sabbatical would not qualify a short term absence but since mine was intended to be short term and kept getting pushed in those short term intervals? This is helping me make a decision on selling my house so trying to get as much insight as I can! Should I call the IRS to ask them as well?