What are the rules to avoid capital gains on a personal residence

Question

Hello,

I'm new to real estate and have sold a house that I completed in August of 2016 and lived in for 2 years.

I am under the impression that I do not owe capital gains on the 95K spread. However I had sold a previous house for no capital gains in 2015.

I understood that you have to live in it for 2 years to avoid capital gains, but is there also a 5 year waiting period?

Thanks,

Steve

Wayne Brooks · Answer

If you lived in it as your primary residence for at least two years you are good. There is no 5 year waiting period.....the rule is actually that you lived in the house for At Least 2 of the last 5 years (you could have rented it out for any time less than 3 years after you met the 2 year requirement, and still get the exemption).....but no 5 year required holding period.

Michael Plaks · Answer

@Steven Byers

There is a 2 year waiting period between no-tax sales, not 5 years. So you're good.

What are the rules to avoid capital gains on a personal residence

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