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Lev
Lev, Tax Advisor
Category: Tax
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I have two homes - one in Washington, DC and the other in Lost

Resolved Question:

I have two homes - one in Washington, DC and the other in Lost River, WV. I live in both; neither is rented; and, I pay taxes in WV.

For purposes of the two year residency rule to avoid capital gains on the sale of the DC home, do I need to do anything? Or, can I do it any time I would like.
Thanks
Submitted: 6 years ago.
Category: Tax
Expert:  Lev replied 6 years ago.

Please see for reference IRS publication 523 - http://www.irs.gov/pub/irs-pdf/p523.pdf

To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

  • Owned the home for at least 2 years (the ownership test), and

  • Lived in the home as your main home for at least 2 years (the use test).

If you have more than one home, you can exclude gain only from the sale of your main home. You must include in income gain from the sale of any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

In addition to the amount of time you live in each home, other factors are relevant in determining which home is your main home. Those factors include the following.

  1. Your place of employment.

  2. The location of your family members' main home.

  3. Your mailing address for bills and correspondence.

  4. The address listed on your:

  5. The location of the banks you use.

  6. The location of recreational clubs and religious organizations of which you are a member.

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