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?
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There's depreciation during the rental period that has to be recaptured.
Seth
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
There's depreciation during the rental period that has to be recaptured. Seth
If the two months of rental were in the same year, there is no depreciation allowed.
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