Sale of primary residence after extended travel

[sumodog123]

I bought my primary residence in March of 2005. We live there until Sept. of 2018 when I took a 1 year assignment in Australia. The house was vacant for 7 months until we decided to turn it to a rental on April 1st. We had a family sign a 15 month lease and move in June 1st. 2019. At what date is that no longer my primary residence? Sept 1st when I left the country, April 1st it was listed as a rental or June 1st when a new family moved it? We plan to sell and need to know when the 5 year period started to avoid captial gains. 

[DoninGA]

September 2018 when you no longer lived in the home is the start of the 5 year period.  You would need to sell the home on or before September 1, 2023.

You must have lived in and owned the home for at least two years in the five year period on the date of sale, you do not have to report the sale if your gains are less then the exclusion amounts of $250,000 if filing Single or $500,000 if filing Married Filing Jointly (and both lived in the home for two years).

[sumodog123]

Thanks for the quick response. So even though it was a temporary assignment and our initial plan was to return living there, it is no longer our Primary Residence? I guess that the 5 year period would have started Sept 2016 and we lived there for 2 years, so we would have to sell by Sept 2021. I think that is what you meant. 

[DoninGA]

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@sumodog123 wrote:

Thanks for the quick response. So even though it was a temporary assignment and our initial plan was to return living there, it is no longer our Primary Residence? I guess that the 5 year period would have started Sept 2016 and we lived there for 2 years, so we would have to sell by Sept 2021. I think that is what you meant. 

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I thought you were living in the home until Sept. 2018.  You posted "We live there until Sept. of 2018".

For the home to be your primary residence you have to live in the home for two years (730 days) in the five year period on the date of sale .  The days do not have to be consecutive.

Review IRS Publication 523, Selling Your Home - https://www.irs.gov/pub/irs-pdf/p523.pdf

[sumodog123]

Hi DoninGA,

We did live in the house until Sept 2018. That means the 2 years we were in the house were from 2016 to 2018 so that I have to sell the house by Sept 2021. If I wait until Sept 2023 as you mentioned, I would not have lived in the house at all in the past 5 years. Am I missing something here?