Section 121 Capital Gain

[rs1784]

I have question regarding capital gains on section 121. My fiancé and I purchased house on 07/01/20. I got offered a new job and will be moving to a different state in 06/01/2022 (so less than 2 years - 23 months to be exact). We don’t plan on selling house until 07/01/2022. Would my exclusion limit be (23 months/24 months) * $250,000 = $239,583 since 1. Fiancé and I won’t be married until middle of June 2020 and 2. Even though the house we are selling will close on 07/01/2022 (which would be 2 year mark), we only technically lived at property as primary residence for 23 months?

[rs1784]

And sorry I meant to say fiancé and I won’t be married until middle of June 2022 - not 2020

[Mike9241]

since you'll be married in 2022, a married (as of 12/31 of the year of sale) couple would get a $500,000 exclusion if they owned the house and both used the house as your principal residence for any 2 out of 5 years before the date of sale. since you will only use the property as your primary residence for 23 months the maximum exclusion will be 23/24 of $500,000 if you file jointly.

it may not matter much but the time periods can be computed using either days or months as long as the method is consistent

[rs1784]

Thank you!