Gain on Home...then rent..how to capture gain
1. Fiance's parents bought a condo in 2006 for ~600k. Only the mother's name is on the property.
2. Fiance lived in the condo for ~5 years with no lease. Basically a grey primary residence for her
3. Now have the option to sell for 900k, or start to rent the apt for some time.
Question is - once the property is placed into rental service, does the family start to lose the home sale gain exclusiion? It was murkey at best to start as her daughter used it as a primary residence but I think it will be harder to justify that the owner (not the family) lived in the apt for 2 of the last five years.
Or in this situation, is it just significantly better to sell the apartment? or could they rent it for 3years and then sell it and then still claim the exemption?
Happy to provide more details. any help appreciated.