topic Re: Sale of Home in Get your taxes done using TurboTax

Sale of Home

erdls — Wed, 17 Sep 2025 19:18:40 GMT

My wife and I built a primary home 30 years ago in one city. We bought a second home in another city 15 years ago. The past two years we have lived in the second home due to the availability of more medical services for a series of medical problems. We maintained our mailing address and voting precinct with the primary home. This year we sold the second home for a profit. Since we owned the first second home for at least 2 years during the 5-year period ending on the date of sale, I believe we meet the Ownership test. Since we have used the home as our principal residence for at least 2 years during that same 5-year window, I believe we have met the Residence test. Since we have not claimed the Section 121 exclusion on another home sale during the 2-year period before the current sale, I believe we meet the Look-Back Test. I believe that our profit on the sale (75K) is not taxable, but I am worried that we did not change mailing addresses or voting precincts. I picked up mail and drove to vote. Do I need to worry about this or only if we are audited? How do I explain this on the tax forms?

Re: Sale of Home

Bsch4477 — Wed, 17 Sep 2025 19:29:17 GMT

No documentation is required. Your situation is easily explained in the unlikely event of an audit.

Re: Sale of Home

AmeliesUncle — Wed, 17 Sep 2025 21:00:28 GMT

@erdls wrote:
We bought a second home in another city 15 years ago.

The past two years we have lived in the second home due to the availability of more medical services for a series of medical problems.

We maintained our mailing address and voting precinct with the primary home.

There are several problems.

You are calling the 30-year home your "primary home". That seems extremely questionable if the 15-year home actually became your Principal Residence, rather than a temporary absence from the other home.

Even IF the 15-year home became your Principal Residence, there is another rule ("Nonqualified Use") that says you can only exclude 2/15ths of the gain (15 years of ownership; the time it was your Principal Residence was AFTER it was not your Principal Residence). In other words, you could only exclude a small portion of the gain.

In addition to only being able to claim 2/15 of gain from that home, it also would mean that two years of the 30-year home was NOT your Principal Residence. The same "Nonqualified Use" rules would result in that whenever you sell the 30-year home, you won't be able to exclude those two years (if you sold it two years from now, you could only exclude 30/32nd's of the gain because there were two years it was NOT your Principal Residence).