We used this as our main home prior to the time we did not use it as our main home - and this falls within the 5 year exclusion rule - the law states that the capital gains is excluded from taxation ? Can you please point me to an IRS regulation which states otherwise ?
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I am trying to research this topic and see if it applies to my situation - in doing so I came across the following entry from the IRS FAQ web site which closely matches my case. https://www.irs.gov/faqs/capital-gains-losses-and-sale-of-home/property-basis-sale-of-home-etc/property-basis-sale-of-home-etc-5 Briefly, I bought a property in 2010 and moved out in 12/2015 to take another job in another state( more than 50 miles from my current home) - in 02/2016 I found a tenant and rented out the property - we didn't know if we would like living in the new state so just wanted to hold on to our property just in case - fast forward to 01/2018 and I asked my tenant to move out and put the property up for sale in 02/2018 - the property sold at a gain and after doing some research I came to the conclusion that all I owe is the depreciation recapture tax for the years I had the property as a rental( 02/2016 through 01/2018). Do I also need to file a form 4797 ? How does Turbo Tax handle this kind of scenario ? Thanks in advance.
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