More clarification on nonqualified use concerning sale of home

[rmhassin]

I recently received an answer that the rental of my home is considered nonqualified use. TurboTaxMichaelL1 directed me to wages and income, less common income, and sale of a home. I got to the section asking: Did you use this home for anything other than your primary home? I initially checked yes because i did rent it out, But my question is concerning the Note that states: If you used your home for reasons other than as your primary residence after it was no loner your primary home, select No. Does this mean that because i lived there before i left and rented it that i select no? If so this is contrary to the initial answer. I did own it for more than 5 years and i did live in it for more than 2 years. Thank you

[PatriciaV]

@TurboTaxMichaelL1 your question.

[MichaelL1 · Accepted solution]

In the prior question, you wrote: "Then I moved back in for 1 year before selling it."

Your situation is somewhat unusual, as this was your primary home, then became a rental, then again your primary home.

"Did you use this home for Anything Other Than your Primary Home?"  you would answer NO due to renting it "After" it was personal use home. 

 I am going to EDIT the prior answer.  Thank you for coming back in and asking about this. 

However, "nonqualified use" does not apply to time that falls into one of the following categories:

1. Periods of time after its use as a principal residence. 

2. Temporary absences due to a change in employment, health or unforeseen circumstances.

3. Any period (not to exceed 10 years) during which you or your spouse (if married) is serving on qualified official extended duty as a member of the uniformed services, the Foreign Service, the intelligence community, or as an employee or volunteer of the Peace Corps.

Here are a few examples:

1. After owning and living in it for several years, you move out of your main home on August 1, 2016, and rent it out for a year before selling it. The time it is rented out doesn't count as "nonqualified use" because it is AFTER being used as a principal residence.

[traciso]

I am still confused on what to select?  I owned the home for 18 year, I lived in it for the first 13, then rented it out for the last five years and then sold it.  I did not move back into the home.  DO I pick YES or NO?

[Bob Reardon]

Select "No". This only applies during the time that you still considered it your primary home.

The question should read "Did you use this home for anything other than as a primary home while you still considered it your primary home." E.g., you could have rented it out for a month while you were on vacation; it would still be your primary home, but it wasn't being used as such during that period of time.