I lived in a home for three years. I moved but kept the house unoccupied except for two months I rented it out. I returned to the house two years later. I sell it. Does the fact that I collected rental income hurt my capital gains exclusion on the sale of the house?
If I understand your facts correctly, you lived in the house for 3 of the last 5 years. That qualifies you for the "main home occupied at least 2 of last 5 years." I would consider the 2 months of rental as incidental, as long as you did not claim any depreciation in the year it occurred. (You did, I presume, report the rental income as "other income" in the year received, right?) Thus, as long as your net profit on the sale of this _qualified_ Main Home is less than $250,000 ($500,000 if MFJ), there is no taxable gain and nothing to report. Bill
If I understand your facts correctly, you lived in the house for 3 of the last 5 years. That qualifies you for the "main home occupied at least 2 of last 5 years." I would consider the 2 months of rental as incidental, as long as you did not claim any depreciation in the year it occurred. (You did, I presume, report the rental income as "other income" in the year received, right?) Thus, as long as your net profit on the sale of this _qualified_ Main Home is less than $250,000 ($500,000 if MFJ), there is no taxable gain and nothing to report. Bill
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