Author Topic: Two home sale exclusions  (Read 463 times)

wageslave23

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Two home sale exclusions
« on: August 01, 2018, 08:15:07 PM »
I have a rental that I used to live in that I'm planning on selling.  I lived in it for the first two of the last 5 years.  Then I want to sell the house I'm currently in.  I will have lived in the current house for more than 2 years but I might selling it less than 24 months from the sale of the 1st house.  Would both still qualify?  Separately I know they both qualify but I'm not sure if the rule that you can't have two home sale exclusions within 2 yrs is an exact 24 months and/or is it only a practical rule for people who are buying a house and selling before living in it for two years.

terran

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Re: Two home sale exclusions
« Reply #1 on: August 01, 2018, 08:22:06 PM »
According to https://www.irs.gov/taxtopics/tc701 you "generally" must wait at least 2 years between exclusions. Whether there is some exception that causes them to use the word "generally" I don't know.

Remember that you'll still need to recapture the depreciation for the time the home was a rental. I've never had to do it, so I don't know the specifics.

ChpBstrd

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Re: Two home sale exclusions
« Reply #2 on: August 01, 2018, 08:45:41 PM »
Publication 523 is authoritative. I see nothing in it limiting the number of home sales you can claim, other than the obvious fact you can only fit two two-year periods into five years.

https://www.irs.gov/publications/p523

You could do a live in house flip every two years tax-free, because for each individual house the residency and ownership tests would both be true.

terran

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Re: Two home sale exclusions
« Reply #3 on: August 01, 2018, 09:26:34 PM »
Publication 523 is authoritative. I see nothing in it limiting the number of home sales you can claim, other than the obvious fact you can only fit two two-year periods into five years.

https://www.irs.gov/publications/p523

You could do a live in house flip every two years tax-free, because for each individual house the residency and ownership tests would both be true.

See Eligibility Step 4 -- Look-Back https://www.irs.gov/publications/p523#en_US_2017_publink10008998

SeattleCPA

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Re: Two home sale exclusions
« Reply #4 on: August 02, 2018, 08:06:26 AM »
FWIW, agree with Terran and ChpBstrd...

wageslave23

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Re: Two home sale exclusions
« Reply #5 on: August 02, 2018, 10:51:49 AM »
FWIW, agree with Terran and ChpBstrd...

Aren't they saying two different things?  It looks like I wouldn't qualify because of the look back

ChpBstrd

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Re: Two home sale exclusions
« Reply #6 on: August 02, 2018, 11:46:14 AM »
Publication 523 is authoritative. I see nothing in it limiting the number of home sales you can claim, other than the obvious fact you can only fit two two-year periods into five years.

https://www.irs.gov/publications/p523

You could do a live in house flip every two years tax-free, because for each individual house the residency and ownership tests would both be true.

See Eligibility Step 4 -- Look-Back https://www.irs.gov/publications/p523#en_US_2017_publink10008998
Terran is correct. I missed that part!

SeattleCPA

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Re: Two home sale exclusions
« Reply #7 on: August 02, 2018, 12:47:38 PM »
I misread Chpbstrd to initially say you could take Sec. 121 every two years... Now I see that was not was he originally said. Sorry.

wageslave23

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Re: Two home sale exclusions
« Reply #8 on: August 02, 2018, 02:57:17 PM »
Thanks everyone for the help.