turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

I’ve lived in my house for 3 years, but only owned for 1 year. If we sell now, will we have capital gains? (Our family income is about 60k if tax bracket matters)

I’m having a hard time finding anything about our peculiar situation. Everything I’ve seen only says that it needs to be your primary residence, which it has, but we’ve only owned for 1 year. 

1 Best answer

Accepted Solutions
Anonymous
Not applicable

I’ve lived in my house for 3 years, but only owned for 1 year. If we sell now, will we have capital gains? (Our family income is about 60k if tax bracket matters)

In general, to qualify for the capital gain exclusion, you must meet both the ownership test and the use test. You're eligible for the capital gain exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale

Your sale qualifies for exclusion of $250,000 gain ($500,000 if married filing jointly) if all of the following requirements are met.

  • You owned the home and used it as your main home during at least 2 of the last 5 years before the date of sale.

  • You didn’t acquire the home through a like-kind exchange (also known as a 1031 exchange), during the past 5 years.

  • You didn’t claim any exclusion for the sale of a home that occurred during a 2-year period ending on the date of the sale of the home, the gain from which you now want to exclude.

Since you only owned the home for 1 year, you currently will not meet the ownership requirement of the equation.  However, if you don't meet the eligibility test, you may still qualify for a partial exclusion of gain if you moved because of work, health, or an unforeseeable event. See https://www.irs.gov/publications/p523#en_US_2016_publink10009005

View solution in original post

1 Reply
Anonymous
Not applicable

I’ve lived in my house for 3 years, but only owned for 1 year. If we sell now, will we have capital gains? (Our family income is about 60k if tax bracket matters)

In general, to qualify for the capital gain exclusion, you must meet both the ownership test and the use test. You're eligible for the capital gain exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale

Your sale qualifies for exclusion of $250,000 gain ($500,000 if married filing jointly) if all of the following requirements are met.

  • You owned the home and used it as your main home during at least 2 of the last 5 years before the date of sale.

  • You didn’t acquire the home through a like-kind exchange (also known as a 1031 exchange), during the past 5 years.

  • You didn’t claim any exclusion for the sale of a home that occurred during a 2-year period ending on the date of the sale of the home, the gain from which you now want to exclude.

Since you only owned the home for 1 year, you currently will not meet the ownership requirement of the equation.  However, if you don't meet the eligibility test, you may still qualify for a partial exclusion of gain if you moved because of work, health, or an unforeseeable event. See https://www.irs.gov/publications/p523#en_US_2016_publink10009005
Use your Intuit Account to sign in to TurboTax.
By selecting Sign in, you agree to our Terms and acknowledge our Privacy Statement.
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
message box icon

Ready to start your taxes?

Hand off your taxes, get expert help, or do it yourself.

See Pricing

Related Content

Manage cookies