Home Sale

[jimvice]

I sold a home in Jan 2021 that was a rental for half the year and my primary residence for half of the year in 2020.  My question is what stipulations are there for the capital gains exemption for primary residence?

[ColeenD3]

The rules are the same. You must meet the exclusion to be able to take the exclusion. However, you must still recapture any depreciation that you took.

There will be a screen in the rental section to indicate that it was also your primary home.

You won't pay taxes on the first $250,000 (also known as a gain) you make from the sale of your home. If you're Married Filing Jointly, you won't pay taxes on the first $500,000.

That income is free and clear as long as:

• You owned the home
• It was your main home for two years or more within the five years leading up to the sale
• You waited at least two years between selling your primary home and excluding your first $250,000 or $500,000 from taxes. In other words, you may buy and sell as many primary homes as you'd like, but you'll only get this tax benefit every two years.