Primary home 2-5 rule capital gain exception/ residence eligibility

[masda2600]

I live in my primary Home 21 years then purchase a new property and didn’t move right away cause it needed it  some repairs so I am back-and-forth from my primary residence to the new property which I am looking to move in permanent as a primary residence,so finally, I moved in on October 23rd  to the new Home  and also I was doing some fixing on the Primary resident to sell it. Finally, I sold the primary residence  in October 25th. Do I still qualify of primary home residence  rule of 2-5  on the IRS code. Thanks 

[Bsch4477 · Accepted solution]

Yes, you qualify. 

[NCperson · Accepted solution]

Yes, because you would look back from Oct 25, 2025 to Oct 26, 2020.  The question is did you live in that home for at least 24 months of the 60 months during this period of time? And you did, since you lived in the home for the 60 months from Oct 26, 2020 until Oct 23, 2025.

Now, the "2 of 5" year clock on the new home didn't begin until Oct 23, 2025, even though you've owned it since 2023 - because it did not become your primary residence until that date.   So if you sell prior to Oct 23, 2027, you would not meet the "2 of 5" rule.

[AmeliesUncle · Accepted solution]

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@masda2600 wrote:

 I am back-and-forth from my primary residence to the new property which I am looking to move in permanent as a primary residence,so finally, 

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I agree with the other comments about your previous home, but it seems like your NEW property was NOT your Principal Residence for a while.  That would affect the Principal Residence exclusion for whenever you eventually sell your new property.