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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15587
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I am selling my home in CA and am looking at a considerable

Customer Question

I am selling my home in CA and am looking at a considerable capital gain. I moved to NH in March 2009, however my wife lived in the home becasue she worked and lived in CA until May of 2012. (She is not on the title as the home was purchased 2 years prior to our marriage)

I also lived in the CA house for 5 consective months from Jan 2012-May 2012, but was W2'd in NH for that timeline. Can i add these 5 months to my two years to meet the 2 year residence requriement? Do I qualify for the 2 out of 5 year rule and avoid having to pay taxes on the capital gains?
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.
Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

If you were living in the house from January to May 2012 then you can add that to your other time you lived in the home to meet the 2 out of 5 year residency requirement. However, you say you moved in March 2009 - that leaves you with one year and eight months of time in the house, which is short from the two year timeframe.

However, you can get a prorated exemption of the capital gains exclusion if you moved because of employment reasons. You can get up to 208,333 in capital gains exclusion which is 83% of 250,000. You have to have moved for unforeseen reasons, such as a change in jobs, health reasons, etc.

You can read more about this topic, HERE.

Please let me know if you need anything additional. Thanks again for using JustAnswer.com and have a great night.

** Please take a moment to rate my response as "Excellent" so that I may receive credit for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site. This answer is not financial or legal advice, and must not be used as such. For financial and legal advice, please contact a local professional.*
You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Customer: replied 1 year ago.

I used the wrong date. I meant March 2010. Can you please re-address the question based on this new timeline?

Expert:  Megan C replied 1 year ago.
Thank you for your follow up. You would meet the requirement based on that timeline. So, you can take the capital gains exclusion.

Thanks again for using JustAnswer.com and have a great night.

** Please take a moment to rate my response as "Excellent" so that I may receive credit for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site. This answer is not financial or legal advice, and must not be used as such. For financial and legal advice, please contact a local professional.*
You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Customer: replied 1 year ago.

thank you. Last point of clarification I promise. during the Jan 2012 thru May 2012 period i lived in the CA house, i did not change my mailing address. My mail continued to be sent to NH. Almost all of my bills are managed online so mail is simply junk mail to me primarily. Will this be an issue. I can clearly prove that i was in CA during this timeline if needed.


 


Thanks again. Great job

Expert:  Megan C replied 1 year ago.
Thank you for you follow up. We're here to help you and I want to make sure you are completely satisfied once you leave the site. It does not matter that your mail was still sent to New Hampshire - this is not an issue. You were physically living in the house -that is what matters.

Please let me know if I can be of any further assistance to you. Thanks again for using JustAnswer.com and have a great day.

** Please take a moment to rate my response as "Excellent" so that I may receive credit for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site. This answer is not financial or legal advice, and must not be used as such. For financial and legal advice, please contact a local professional.*
You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Customer: replied 1 year ago.

one more point to clarify please. During the Jan 2012 thru May 2012 timeline that i lived in the CA house in addition to maintaining my mailing address in NH, I also continued to be W2'd in NH. I did not pay CA taxes during this time.


 


Does this 5 month period still meet the intent of use of the house as my primary residence. I did live consistently during this timeline.


 


Please confirm. Thank you

Expert:  Megan C replied 1 year ago.
Thank you for your follow up. Yes, that period meets your intent of using the house as your primary residence. You lived there as your main residence.

Thanks again for using JustAnswer.com and have a great day.

** Please take a moment to rate my response as "Excellent" so that I may receive credit for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site. This answer is not financial or legal advice, and must not be used as such. For financial and legal advice, please contact a local professional.*
You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15587
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 3 other Tax Specialists are ready to help you
Customer: replied 1 year ago.

Sorry for the back and forth. Now that we have establised that i qualify for the exclusion of capital gains. Can you confirm if the exclusion amount is for $250k (single) or $500k married? I was single when i purchased the home in 2007, and was married in 2010 to present. My wife is not on the title of the home.


Please confirm. Thank you!

Expert:  Megan C replied 1 year ago.
You can claim $500K of exclusion. Only one spouse had to own the house, but if both spouses meet the residency requirements then $500K can be excluded. You can read about that in the link I provided with my original answer.

Thanks again for using JustAnswer.com and have a great day

** Please take a moment to rate my response as "Excellent" so that I may receive credit for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site. This answer is not financial or legal advice, and must not be used as such. For financial and legal advice, please contact a local professional.*
You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Expert:  Megan C replied 1 year ago.
Thank you for the positive rating. I really enjoyed working with you – please feel free to request me again when you come back to ask another question. Simply enter "MyVirtualCPA" in the subject of your question, and it will be routed directly to me. Thank you again for using JustAnswer. For the quickest service, please post a new question.

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Megan C
Megan C
Tax Professional
15587 Satisfied Customers
Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level