Capital gains/Rental Property

Forum|Forum|3 years ago
February 17, 2023
1 reply
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I purchased a home as a primary residence and lived in it 2 of the last 5 years. Roughly 2 years ago my husband and I decided to turn it into a rental and transferred the title into an LLC. We (the LLC) sold the house last year. Since we lived in it for 2 of 5 years, we should be exempt from paying capital gains on the percentage of time we were living there. There is no prompt on TurboTax business to input this information. How do we indicate this to avoid paying capital gains on the full amount?

TurboTax Business Windows

Carl11_2

Employee

If the LLC is the titled owner of the property, then there's no way the titled "owner" at the time of the sale lived in the property for two of the last 5 years.

MrMrsLandlordsAuthor

Thank you very much for your speedy and helpful response! Is the lesson here that we should have moved it back into our names before selling?

Carl11_2

Employee

Actually, you should have never transferred ownership in the first place. This is just my personal opinion, as I don't know the particulars of why you transferred ownership in the first place, and it's probably none of my business anyway.