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I have a question about tax exemption for sale of a house. I…

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Hello, I have a question about tax exemption for sale of a house

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I bought the house in April 2011, and lived in it (renting a room) till Nov Sept 2015. I then completely rented it till Nov 2017, when I sold it. Can I claim an exemption?

Submitted: 23 days ago.Category: Tax
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3/29/2018
Tax Professional: Lev, Tax Advisor replied 23 days ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,685
Experience: Taxes, Immigration, Labor Relations
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To satisfy for section 121 exclusion

See IRS publication 523

https://www.irs.gov/pub/irs-pdf/p523.pdf

page 3 - Eligibility Step 3—Residence

Determine whether you meet the residence requirement. If you owned the home and used it as your residence for at least 24 months of the previous 5 years, you meet the residence requirement. The 24 months of residence can fall anywhere within the 5-year period, and it doesn't have to be a single block of time.

All that is required is a total of 24 months (730 days) of residence during the 5-year period.

.

So far we need to consider 5 years before the sale - from Nov 2012 till Nov 2017

and during that period you meet the residence requirement.

Therefore - you may use that exclusion.

However - that exclusion may not be applied to accumulated depreciation - and the part of your gain up to depreciation allowed or allowable may not be excluded and will be taxable.

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Customer reply replied 23 days ago
My accountant is insisting that I cannot claim the exemption, because I was not living in the house when I sold it. She claims that the house has to be my primary residence when I'm selling it for any of this to apply. Can you double-check/verify with another pro? I'll pay for another question.
Tax Professional: Lev, Tax Advisor replied 23 days ago

I provided above exact reference to the IRS publication.

You may print that publication or just that one page and provide to your accountant.

I hope she will change her position.

The IRS clearly said - All that is required is a total of 24 months (730 days) of residence during the 5-year period.

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Tax Professional: Lev, Tax Advisor replied 18 days ago

I appreciate if you take a moment to rate the answer.

Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all Social Security / Tax related issues
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