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Primary home 2-5 rule capital gain exception/ residence eligibility

masda2600 — Sat, 22 Nov 2025 17:20:44 GMT

I live in my primary Home 21 years then purchase a new property and didn’t move right away cause it needed it some repairs so I am back-and-forth from my primary residence to the new property which I am looking to move in permanent as a primary residence,so finally, I moved in on October 23rd to the new Home and also I was doing some fixing on the Primary resident to sell it. Finally, I sold the primary residence in October 25th. Do I still qualify of primary home residence rule of 2-5 on the IRS code. Thanks

Re: Primary home 2-5 rule capital gain exception/ residence eligibility

Bsch4477 — Sat, 22 Nov 2025 17:24:58 GMT

Yes, you qualify.

Re: Primary home 2-5 rule capital gain exception/ residence eligibility

NCperson — Sat, 22 Nov 2025 20:56:25 GMT

Yes, because you would look back from Oct 25, 2025 to Oct 26, 2020. The question is did you live in that home for at least 24 months of the 60 months during this period of time? And you did, since you lived in the home for the 60 months from Oct 26, 2020 until Oct 23, 2025.

Now, the "2 of 5" year clock on the new home didn't begin until Oct 23, 2025, even though you've owned it since 2023 - because it did not become your primary residence until that date. So if you sell prior to Oct 23, 2027, you would not meet the "2 of 5" rule.

Re: Primary home 2-5 rule capital gain exception/ residence eligibility

AmeliesUncle — Sat, 22 Nov 2025 22:43:36 GMT

@masda2600 wrote:
I am back-and-forth from my primary residence to the new property which I am looking to move in permanent as a primary residence,so finally,

I agree with the other comments about your previous home, but it seems like your NEW property was NOT your Principal Residence for a while. That would affect the Principal Residence exclusion for whenever you eventually sell your new property.