Will i get prorated capital gains exemption if live in house 1 year, move b/c of a job, but then still rent it for 4 years before selling, or do i have to sell at moving?

kumar359 — Mon, 03 Jun 2019 20:16:30 GMT

You can wait to sell it, but no more than 4 years after m...

Hal_Al — Mon, 03 Jun 2019 20:16:32 GMT

You can wait to sell it, but no more than 4 years after moving out or within 5 years of moving in to the old residence. Because you did not live in the house, the require 2 years, your maximum exclusion is reduced.

Job relocation is an exception to the 2 year rule. Your new job location must be at least 50 miles farther from the sold home than the old job location. You are entitled to a prorated amount of the $250,000 ($500,000 married) exclusion. Example : if you lived in the old home 438 days (within the 5 years before you sold it) you could exclude up to 60% {438/(365x2)} of the maximum amount or $150,000. Note that that your max exclusion will be reduced if you delay selling past the 4 year mark.

You will pay tax on the "depreciation recapture" portion of the gain for when it was rented out.

Incidentally, the job exception opens a loop hole for you. Ordinarily, you have to sell within three years of moving out to get the tax break. But because of the job change you can wait the 4 years you plan to.

topic Will i get prorated capital gains exemption if live in house 1 year, move b/c of a job, but then still rent it for 4 years before selling, or do i have to sell at moving? in Investors & landlords

Will i get prorated capital gains exemption if live in house 1 year, move b/c of a job, but then still rent it for 4 years before selling, or do i have to sell at moving?

You can wait to sell it, but no more than 4 years after m...