topic principal house tax exempt question in Investors & landlords

principal house tax exempt question

x_m_z — Tue, 10 Feb 2026 10:00:15 GMT

My wife and I purchased a house five years ago, utilizing it as our primary residence for 30 months, subsequently, we established a rental business and leased it out (including Airbnb) for an additional 30 months. Assuming the house appreciated by $100,000 each year, if we sell it now, realizing a total price gain of $500,000 (ignoring depreciation payback for simplicity).

Are we eligible to claim the full $500,000 exclusion, or are we limited to claiming $250,000 since 30 months were used for the rental business?

Thank you.

Re: principal house tax exempt question

Carl — Tue, 16 Jan 2024 14:35:57 GMT

YOu would qualify for the exclusion.

If the property was your primary residence for 2 years (730 days) of the last 5 years (1826 days) you owned it, counting back from the closing date of the sale, you qualify for the exclusion.

Re: principal house tax exempt question

AmeliesUncle — Tue, 16 Jan 2024 19:28:03 GMT

Just make sure it is sold within three years of your moving out. Otherwise, you could potentially lose the entire exclusion.