Section 121 Exclusion 730 Day Requirement

[millerm52]

I purchased the home 10 years ago but have only lived in the home full time the past 18 months.  Can I use the days spent in the home and listed in my prior California tax returns, dating back to 2021, to reach the 730 day requirement?

[Bsch4477]

Test: You must have used the home as your principal residence for at least two years (24 months or 730 days) out of the five years before the sale. The time does not have to be consecutive. 

[AmeliesUncle]

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@millerm52 wrote:

the days spent in the home 

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It is not merely "days spent in the home"; it needs to be your "Principal Residence" during that time period.

What was your reason for moving out?  There are some special circumstances that allow an exclusion if you use it as your Principal Residence for less than two years.

Because it recently was your Principal Residence but has not always been your Principal Residence since you bought it, even IF you qualify for the Section 121 Exclusion, it may be prorated.  As a simplified example, if you owned it for exactly 10 years, and it was 8 years of non-Principal Residence followed by 2 years of your Principal Residence, you could only exclude 2/10ths of the gain (not counting any gain due to depreciation).