As military family when selling my home, can the capital gains be exempt? Am I eligible for period of suspension?

[beth483]

We are military and we bought our home and lived in it for 1 year and 7 months.  We moved to another state due to military and have not lived in the home since then. We rented it the house out from June 2006 to December 2017.  We did not rent it in 2018 and sold it in May 2018.   Will we be able to receive capital gain exemption due to period of suspension?  how do we enter in turbo tax?

[BMcCalpin]

First, please see https://www.irs.gov/taxtopics/tc701 for information on how the gain on the sale of a home affects active duty military.

I am not sure that you qualify for the up to 10 year grace period, but to find out, please do the following:

Do a Search for "sale of home, exclusion" (all lower case, without the double quotes). Jump to it.

Go through the home sale interview. When you get to the screen that is headed "Reason for Sale", indicate "other reasons".

On the next screen, it will ask you if you are military, foreign service, intelligence community employee, Peace Corps. Check that box.

The next screen will start a number of questions designed to see if you qualify under the special rule for military, foreign service, intelligence community employee, and Peace Corps.

[adbrannon]

Hi,

   Similar situation and Im filing online.  H&R block doesn't ask the military question for me to be given the exception.  I spoke with military one source to get their take on it and as long as we meet the publication 523 2 year rule we can be excluded.  Meaning, you have to have lived 2 out of the 5 years in the home.  If you PCSd after 2 years, they extend the time to 10 years if you were on duty >50 miles from your home.  Read both publications thoroughly.  

IRS Publication 3 page 18 https://www.irs.gov/forms-pubs/about-publication-3

IRS Publication 523 page 4 and 5 https://www.irs.gov/forms-pubs/about-publication-523