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I sold my 4-plex 9/1/2017. During the last 5 yrs, it was my…

I sold my 4-plex...

I sold my 4-plex 9/1/2017. During the last 5 yrs, it was my principal residence for 2 years. I am also 65 years of age & am disabled. This is the major reason for the sale. My profit from the sale was $249K (prop sold for $780K) Do I qualify for maximum or reduced exclusion (Californis resident).

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3/9/2018
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,637
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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California follow Federal guidelines for the exclusion of $250,000/$500,000 income exclusion for sale of a primary residence.

___

Since the home was your primary residence for two out of the previous five years you would qualify for the income exclusion.

___

Below is a link to 26 U.S. Code § 121 - Exclusion of gain from sale of principal residence

https://www.law.cornell.edu/uscode/text/26/121

Please let me know if this has answered your question or if you have any additional questions.

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Customer reply replied 4 months ago
Does being considered investment property during the years if non residence I only qualify for reduced (75%) exclusion

Being an investment property in the three years that you did not live in the home as your primary resident would not exclude you or reduce the exclusion

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What would reduce the exclusion is if you maintained half the duplex as a rental and only the other half as a personal residence.

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If you only occupied 25% of the property, then that would be the only part eligible for exlusion

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Customer reply replied 4 months ago
No phone call necessary. Thanks.. info provided is sufficient.

The call offer comes up automatically. You may ignore.

Please do ask any additional questions.

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When you have no further questions please take a moment to accept the answer, a positive rating of 5 stars is much appreciated.

Thank you!

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Customer reply replied 4 months ago
No, I lived in one of the units for 2 years& rented the other 3 units. I have a professional tax preparer looking at my taxes & indicates I qualify for reduced not full. I have also used 2 on-line tax programs and only one of them gives me full exclusion. Thus my confusion.

The tax preparer is correct. In order to qualify you have to occupy the whole residence for two out of five years.

When you stated this:

" During the last 5 yrs, it was my principal residence for 2 years."-- I believed you were stating you occupied all of the home.

Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,637
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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