Question

Can I use the capital gains exclusion if bought the home from a renter? We have lived here for over 3 years but only owned it officially for 2 years.

Forum|Forum|5 years ago
April 25, 2021
2 replies
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My mother in law purchased a home for us to rent from her. We later bought it from her offically. We've lived at this residence for 3 years, and have owned it for 2. We rented it out the last few months of ownership. Can we claim the year prior to owning as the residency exclusion on capital gains?

TurboTax Deluxe Online

T

TomD8

Employee

To qualify for the capital gains exclusion, you must have owned the home and lived in it as your primary residence for at least two of the five years leading up to the date of sale.

https://www.irs.gov/taxtopics/tc701

**Answers are correct to the best of my ability but do not constitute tax or legal advice.