Capital Gains Tax Implication and Advice
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