Do I qualify for capital gains exclusion?

Real Estate, Taxes
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August 2016
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To qualify for the 121 tax exclusion you must pass two tests, the use test and the ownership test. You must live in your primary residence 2 out of the last 5 years to qualify. You can exclude up to $250,000 if you are married and up to $500,000 if you are married.  Since you lived in #10 for at least two out of the past five years and that $200,000 is under $250,000, you do qualify for the capital gain exclusion for that home. However, rental #9 is unfortunately fully taxable at capital gain rates. You could do a 1031 exchange on #9 and buy another rental, but it has to be a rental for a rental – it can’t be a rental for a residence. There’s really no way to roll a gain from a rental into a principal residence.

August 2016