Hello, purchased a home in georgia, lived in it from 7/1/21-3/12/24 and its been rented out since.
What date do I need to sell this by in order to avoid capital gains? THANKS!
How long to sell to avoid cap gain
byu/Ordinary_Inside_5496 intax
Posted by Ordinary_Inside_5496
3 Comments
Rules may be different for an income property so you should consult with a accountant
You must live in the house 2 of the last 5 years.
If you don’t plan on moving back in it must be sold by 3/12/27 (3/12/24 – 2 years lived in= 3/12/22 + 5 years total)
If you move back in you could sell it by 3/12/2029 (3/12/24 rented for 3 years = 3/12/2027 + 2 years live in), 2028 if only living in it a year
Dont forget that only the first $250,000 of capital gains are exempt (price you sell house for – price you bought house for = capital gains), double that if married
Add three years to 3/12/2024 == 3/12/2027. That’s the last date on which you’d have lived in the house for two full years of the last five.
I think there are some circumstances (job relocation, etc) that allow for a prorated benefit if you don’t meet the entire 2 year requirement. I dunno.
I’m no CPA but I think there will be some depreciation recapture for the time the house was rented, and I think this applies to depreciation you *should* have claimed regardless of whether you did.