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    Can a house owned for 3 years but on rent for 2 years (then sold) qualify for sale as residential home?

    singh
    Level 7
    ‎12-07-2019 10:49 AM

    Client bought a residential home in June 2016 , lived in it for 6 months and then gave on rent from 01/01/2017 until he sold it on 09/30/2019.

    Can he now regard the sale as personal residential home and avoid the capital gain tax?

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    Just-Lisa-Now-
    Level 15
    Level 15
    ‎12-07-2019 10:49 AM

    If they lived in it for 24 months out of the last 60 months before sale, it can qualify for IRC121, there will still be some depreciation to recapture from the time it was a rental though.


    ♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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    3 Comments 3
    George4Tacks
    Level 15
    ‎12-07-2019 10:49 AM
    Why did they only live there 6 months? Move? Divorce?  That may impact the answer.

    Answers are easy. Questions are hard!
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    Accountant-Man
    Level 13
    ‎12-07-2019 10:49 AM
    No. You've answered it yourself. The law says owned AND lived in it for 24 months. They didn't,  so unless they moved for a certain specified reason for leaving, no exclusion.
    ** I'm still a champion... of the world! Even without The Lounge.
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    Just-Lisa-Now-
    Level 15
    Level 15
    ‎12-07-2019 10:49 AM

    If they lived in it for 24 months out of the last 60 months before sale, it can qualify for IRC121, there will still be some depreciation to recapture from the time it was a rental though.


    ♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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