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We lived in our home for 19 years, then rented it out for…

Customer Question
We lived in our...

We lived in our home for 19 years, then rented it out for 3.5 years out of the last 5 years. If we sell the house today, do we have to pay capital gains tax on the gains for the entire time we owned the property?

Lawyer's Assistant: What steps have you taken so far? Have you prepared or filed any paperwork?

No

Lawyer's Assistant: Where is the home located?

Corvallis, Oregon

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

I can't think of anything.

Submitted: 3 months ago.Category: Real Estate Law
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Answered in 1 minute by:
5/16/2018
Real Estate Lawyer: Ray, Lawyer replied 3 months ago
Ray
Ray, Lawyer
Category: Real Estate Law
Satisfied Customers: 48,926
Experience: Texas Attorney for 30 years dealing in real estate
Verified

Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question, conduct and prepare your response.

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Real Estate Lawyer: Ray, Lawyer replied 3 months ago

As long as you lived in it 2 out of last 5 years you can claim the exclusion for long term capital gains, you need to do it now you are getting close..

Imagine making $250,000 and not having to pay taxes on it. That's the generous tax break –the home sale exclusion -- homeowners are entitled to when they sell their primary residence for a gain after having lived in the home for at least two of the five years immediately preceding the sale.Oct 24, 2013

The Big Capital Gains Tax Mistake Homeowners Make - Forbes

https://www.forbes.com/sites/ashleaebeling/.../a-costly-tax-mistake-homeowners-make/

I appreciate the chance to help you today.Thanks

If you can positive rate 5 stars it is much appreciated.

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Customer reply replied 3 months ago
They did NOT answer my question. It specifically asked about renting out our home for 3.5 years over the last 5 years.
Real Estate Lawyer: KLAW, Arbitrator replied 3 months ago
KLAW
KLAW, Arbitrator
Category: Real Estate Law
Satisfied Customers: 2,501
Experience: I have over 20 years of experience in commercial real estate law, finance, consumer credit, landlord tenant, and business law.
Verified
Good afternoon. I am another legal expert attorney who will assist you further.The exclusion depends on the property being your residence.You must have lived in the home for a minimum of two out of the last five years immediately preceding the date of the sale. So you must count backwards five years.The two years don't have to be consecutive and you don't actually have to live there on the date of the sale. You can live in the home for a year, rent it out for three years, then move back in for 12 months.However, if I am reading your question correctly, you only lived in the house for 1 1/2 years out of the last five. That would take it out if the exclusion and you would have to pay capitol gains tax. The income on the sale of your home is reported on Schedule D as a capital gain.I hope this clarifies. Please don’t forget to rate the question with stars. We as attorneys are not employees of Just Answer and are not paid unless you rate the question with stars.
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DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

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