topic Capital Gains in Get your taxes done using TurboTax

Capital Gains

Lea212 — Tue, 10 Mar 2026 05:15:03 GMT

Hello, I sold a home in 2021 and bought another, however I sold that new one in March 2022 after only having lived in it for 10 months. What are my options to avoid paying taxes on my capital gains of that home? Since I married military and we now live in military housing its unlikely I will be buying another primary residence.

Re: Capital Gains

OpeA1 — Wed, 08 Jun 2022 18:46:42 GMT

Hello @Lea212!

The rules on property sales are as follows:

You won't pay taxes on the first $250,000 (also known as a gain) you make from the sale of your home. If you're Married Filing Jointly, you won't pay taxes on the first $500,000.

That income is free and clear as long as:

You owned the home
It was your main home for two years or more within the five years leading up to the sale
You waited at least two years between selling your primary home and excluding your first $250,000 or $500,000 from taxes. In other words, you may buy and sell as many primary homes as you'd like, but you'll only get this tax benefit every two years.

In your specific case, since you sold the house after 10 months, there is next to no way to avoid the capital gains as outlined by the IRS. Sorry, but you only avoid this after owing it for 2 years.

Thank you!

Re: Capital Gains

drc845443 — Wed, 08 Jun 2022 18:58:43 GMT

Hello,

It is not clear whether you excluded the gain from the sale of your home in 2021, because if you did, that would disqualify you from excluding the gain on the sale of your home in 2022.

I have attached links that cover the rules for claiming the exemption below, which you may find informative:

https://turbotax.intuit.com/tax-tips/home-ownership/tax-aspects-of-home-ownership-selling-a-home/L6tbMe3Dy

https://www.irs.gov/taxtopics/tc701

Re: Capital Gains

melj1 — Wed, 08 Jun 2022 19:57:19 GMT

Buying the home provides you with a variety of tax breaks. Selling your home means you must anticipate paying taxes on the profit from that sale. But the rules can be a bit complex. For example, that in previous tax years, a tax break has been offered to any homeowner, military or not, who lived in the home for at least two of the five years before the sale.

In these cases, the seller was allowed to exclude $250K for a single filer and $500K for a married couple–that is money exempt from federal taxation if you used your home as the principal residence for two of the five past years. Under the rules governing this set of circumstances, the seller is not permitted to get a capital gains exemption more than once every two years or 24 months.

There is big potential to misunderstand the nature of this taxation–the tax you pay is on the net profit from the sale, not the total amount. If you sell a house for $250,000 and it cost $150,000, the tax you pay would be based on the amount of gain remaining any capital improvements and other expenses have also been factored in.

If you have a gain on the second residence, it will be taxed because the exemption can only be used once in two years and likely did not live in it long enough to qualify regardless.

Mel