Question

Is a home a "second home" if it is the only one you own?

Forum|Forum|3 years ago
February 7, 2023
1 reply
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I bought a home in 2020 that I fixed up and sold in 2022 without it ever being my primary residence. I stayed there for a few months while I was fixing it up, but mostly I was living at the home of a friend. The house that I sold was the only one I have ever owned. Is this still considered a "second home" for the purposes of capital gains tax?

V

Vanessa A

Yes, it could still be a second home or investment property, depending on what your intent was.

However, since you did not live in it for 2 out of the last 5 years, it would not qualify for the home sale exemption, which means all of the profit on the sale of the house will be taxed at your capital gains rate which depending on your income will be 0% if your income is less than $41,675 or 15% if your income is less than $459,750 if single.

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