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Under Section 121 of the tax law, your main home is the home you owned and lived in (more nights in a year if you have more than one home) for at least 2 years out of the 5 years prior to the sale.
Have you owned and lived in this property for at least 2 years out of the 5 years before you sold it?
Please tell me the specifics. Perhaps you are allowed a portion of the exclusion.
Yes. You would be allowed a portion of the exclusion on the gain. This is covered under IRC 121
When you sale a rental property though you have a recapture of depreciation. The exclusion cannot be allowed against that just the tax on the gain.
You have to calculate your gain based on the original cost less the depreciation claimed plus improvements and teh sale price less costs to sale.
You do claim as primary but you still have to show as a slae for the rental portion
You prorate the exclusion based on how much time you did live there in the 5 years. If you do have a gain from the sale you have to look to paying tax on the depreciation you claimed while it was rental. That part cannot be lessened by the exclusion.
Sure go ahead
The reduced maximum exclusion is computed by multiplying the maximum dollar limitation ($250,000 or $500,000) by a fraction.
The numerator of the fraction is the shortest of the following periods of time:
(1) the taxpayer’s ownership of the property during the five-year period ending on the date of the sale or exchange,
(2) the taxpayer’s use of the property as the taxpayer’s principal residence during the five-year period ending on the date of the sale or exchange, or
(3) the length of time between the date of a prior sale or exchange of property for which the taxpayer excluded gain under section 121 and the date of the current sale or exchange.
The denominator of the fraction is 730 days or 24 months (depending on whether the numerator is measured in days or months).
You could exclude almost $292,000