topic Rental Property Sale Captain Gain Tax in Investors & landlords

Rental Property Sale Captain Gain Tax

dandanyaodan — Sat, 25 Jan 2025 12:24:15 GMT

We purchased a house in 2008 and lived there as our primary residence until 2015. After that, we rented it out and recently sold it in 2024. The main reason for selling the rental property is our plan to move from the East Coast to the West Coast due to a job change.

Can we qualify for a partial capital gains exclusion on this sale? IRS Publication 523 is quite confusing, and any clarification would be greatly appreciated.

Re: Rental Property Sale Captain Gain Tax

MindyB — Sat, 25 Jan 2025 17:27:46 GMT

No, unfortunately, since you didn't reside in the home for any of the 5 years, you can't meet the test of residing in the home for a total of 2 of the last 5 years before the sale to qualify for the exclusion.

You are correct in that there can be relief for taxpayers who moved for work, but again, you would have to meet the residence test.

Here is a more easy-to read summary that explains Publication 523: Tax Aspects of Home Ownership: Selling a Home

Re: Rental Property Sale Captain Gain Tax

dandanyaodan — Sat, 25 Jan 2025 19:56:29 GMT

Thank you! This is really helpful!