Tax on selling primary home in June 2023 when sold another primary home in April 2021

Forum|Forum|2 years ago
May 9, 2023
2 replies
0 views

Situation - Had primary home for 7 years (Stayed and owned for 7 years) and then sold in April 2021. Got some gains and those gains were excluded because it was primary home.

Bought new home in May 2021. Owning and staying in new home since May 2021.

Now if we decide to sell this new home in June 2023, Do we have to pay capital gain tax? We stayed /owned in new home for 25 months already.

I am confused about 2 out of 5 years staying/owning in primary home.

@primaryhome @Capital gains @tax11_2 exclusion

Not A Product Question

Best answer by rjs

You owned and lived in your new home for more than 2 of the past 5 years, and the last time you used the exclusion was more than 2 years ago, so you will qualify for the full exclusion of gain on your new home if you sell it in June 2023 (or later).

rjsAnswer

Employee

Opus 17

Employee

You can exclude up to $250,000 ($500,000 if married filing jointly) but any gain over that is taxable, of course.

The rule is you must own the home at least 2 years (you did), and

You must have lived in the home at least 2 years of the past 5 years as your main home. This simply means that counting back from the sell date, you must have used the home as your main home for at least 730 days out of the past 5 years. It doesn't mean you have to own it 5 years, just that you lived in it at least 730 days recently. Since you only bought the home in May 2021, the rule is satisfied if you used it as your main home for at least 730 days of the 760 days you will have owned it as of the sell date.