Can I reduce the income tax paid on the capital gain? I owned two homes and lived in both. I recently sold one, which I owned for 25 years and used as my main residence for 18 years. I lived in that house for 2 and 1/2 years in the last 5 years.
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If you own or live in more than one home, the test for determining which one is your main home is a "facts and circumstances" test. If you decide the home you sold can meet this test you will qualify for the exclusion. TurboTax will walk you through the questions.
The most important factor is where you spend the most time. However, other factors can enter the picture as well. The more of these that are true of a home, the more likely it is your main home.
The address listed on your:
U.S. Postal Service address,
Voter Registration Card,
Federal and state tax returns, and
Driver's license or car registration.
The home is near:
Where you work,
Where you bank,
The residence of one or more family members, and
Recreational clubs or religious organizations of which you are a member.
How your sale qualifies. Keep this in mind for the sale of your current home.
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.
If you own or live in more than one home, the test for determining which one is your main home is a "facts and circumstances" test. If you decide the home you sold can meet this test you will qualify for the exclusion. TurboTax will walk you through the questions.
The most important factor is where you spend the most time. However, other factors can enter the picture as well. The more of these that are true of a home, the more likely it is your main home.
The address listed on your:
U.S. Postal Service address,
Voter Registration Card,
Federal and state tax returns, and
Driver's license or car registration.
The home is near:
Where you work,
Where you bank,
The residence of one or more family members, and
Recreational clubs or religious organizations of which you are a member.
How your sale qualifies. Keep this in mind for the sale of your current home.
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.
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