Capital Gains Tax Implication and Advice

[Kapil Patel]

Hello all,

I understand, owning a personal property and living in it for more than 2 years you can be exempt from capital gains. I also understand, if you flip your personal property to rental then you can be exempt 2-5 years of sale date.

Two questions here:

1. Can you repeat the 2 year exempt of capital gains? First and sell, second and sell, and third and sell etc. ???

2. In any case if question #1 does not work and you can only benefit from no capital gain tax once, then what happens in a scenario, you buy first property and live in it for 2 years and turn into a long term rental (superseding the 2 out of 5 years of sale date) like renting for 8 years and then sell. Then get hit with the capital gains tax, but then when you buy second property and live in there 2 years and sell, do you get to transfer over the 2 years no tax benefit since you did not use it on the first property? So essentially question number #2 is only valid if question #1 is not allowed. Or you essentially lose out on this benefit entirely since you did not take advantage in first home?

I am not sure how the capital gains tax works guys and need some insight. I bought my first property and I am in a huge learning curve.

Thank you BiggerPocket community,

Kapil

[Patrice Penda]

hey @Kapil Patel
Yes, you can repeat the process every time you buy a primary residence and live in that property for 2 years.
When you move on, you are not subject to capital gain tax up to 250K of gain if you are single and 500k if you are a couple.