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Dave, Bookkeeper
Category: Tax
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Experience:  Four years doing books, taxes, and accounting
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My husband and I purchased a 2 family home in July of 2004.

Resolved Question:

My husband and I purchased a 2 family home in July of 2004. We lived in 1/2 until April of 2007 when we moved to a single family home. Unfortunately, the sale of the 2-family fell through and we have been renting it ever since. If we sell the house in the future, will we have to pay capital gains? Is there a time when it would be better to sell than others... like sooner rather than later?
Submitted: 5 years ago.
Category: Tax
Expert:  Dave replied 5 years ago.
Good eveningCustomerand welcome to Just Answer!

In order to obtain an exclusion on the capital gains tax you and your husband must have lived in the home as your primary residence for 2 out of the past 5 years. This 2 out of the past five years does not have to be consecutive, but it does have to be 2 out of the last 5. For example you could have lived in the house for one full year in 2005, rented it for 2006 and 2007, and then moved back in for all of 2008 and finally moved back out in 2009. This would provide you with a total of 2 years out of the last 5 years even though the years were not consecutive and even though you would not currently be living in the home. The best time to sell to avoid capital gains would be during the time period where you have met that 2 out of 5 year exclusion. Therefore, it will all be in the timing and insuring that you have lived in the home as your primary residence for a minimum of 2 out of the past 5 years in order to avoid capital gains on the home. Please let me know if I can be of any further assistance. Thank you for using Just Answer and please remember to leave feedback after you have clicked the Green Accept button. Have a great weekend and best of luck with selling your home.
Dave, Bookkeeper
Category: Tax
Satisfied Customers: 697
Experience: Four years doing books, taxes, and accounting
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Dave
Dave
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Four years doing books, taxes, and accounting