Sold my primary residence in May 2016. Selling primary residence again in May 2018. Do I meet “look back” requirements of Pub 523? Can only claim once every 2 years?

[alexrlopez1]

I sold my primary residence in May 2016 and had previously lived there 2 years and therefore did not pay capital gains. I also purchased my new primary residence in May 2016. I am looking to sell this property in May 2018, so i will have lived there as my primary residence for 2 years and meet that requirement. My question is, do i meet the Publication 523 - Look Back Requirements?  I am confused on this statement, "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".

Pub 523 says, "If you didn’t exclude gain for selling a home on your tax returns for the previous two years (and you don’t intend to do so on any returns or amended returns for the past two years that aren’t yet filed), you meet the look-back requirement". So if I claimed the exclusion for the May 2016 sale on my 2016 taxes, so the exclusion was claimed in April 2017. If i sell again in May 2018, will i be able to claim the exclusion again on my 2018 taxes, claimed in April 2019?

[Coleen3]

There is an update on the look back rule.

As explained in Publication 523, a taxpayer can exclude up to $250,000 ($500,000 if married filing jointly) of gain on the sale or exchange of a main home of if they meet certain requirements. One of these requirements is that the taxpayer cannot have excluded gain on the sale or exchange of another main home during the 2-year period ending on the date of the most recent sale or exchange. This requirement is explained on page 3 of the 2016 revision of Publication 523, under the heading “Eligibility Step 4 – Look-Back.” The text on page 3 should refer to the 2-year period preceding the date of the sale of the current home as explained above. The 2-year look back period is not based on the number of years between tax returns or amended returns reporting the sales or exchanges. 

However, be careful to count days. When they refer to two years, it means 24 full months, 730 days (731 if there is a leap year.) If you bought on May 1, 2016, make sure there are at least 730/31 days before you sell it to meet the exemption.

https://www.irs.gov/pub/irs-pdf/p523.pdf

[RobSpinach]

I am also eligible for the look back rule, but cannot find that exemption in this year’s version of TurboTax.  Can anyone point me there? -Rob

[JosephF8]

To get there in TurboTax

1. click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
2. Next click on “I’ll choose what I work on”
3. Scroll down the screen until to come to the section “Less Common Income”
4. Choose “Sale of Home (gain or loss)” and select “start’
5. You will want to use the "Easy Guide" to determine the adjusted basis on this home 

Say "yes" that you sold your main home and TurboTax will guide you on entering this information.  You will need:

• The date you sold your home and the selling price (from your closing statement)
• The date you bought your home and the purchase price (from your closing statement)
• The cost of any major improvements you made, so we can deduct them for you
• Form 1099-C if you sold your home at a loss (short sale)

TurboTax will ask if you have sold another Main Home

You would select the appropriate answer