Capital gain tax 5 years rule question
Hi everyone,
I would appreciate if someone can answer this question for me.
I bought a house in Houston in March of 2012. We lived in it for two years and been renting it since.
I am selling my house next month which will make it 5 years and 8 months.
Can I qualify for exemption from capital gain tax?
Thanks in advance
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Dave Foster
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@Michael Plaks, @Dave Toelkes is right. The three tests limit the look back to a 5 year period prior to the sale of the property. It must have been the residence of the owner/taxpayer for a cumulative, not consecutive, 24 months out of the 60 months prior to sale.
What will really bite is if the current reform proposal is approved that will increase to a 5 year residency period out of the 8 years immediately prior to sale.
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