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Exclusion on sale of residence

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    Exclusion on sale of residence

    TTB says that tp must live in house 2 of last 5 years in order to take exclusion. What if the house was only built 1 1/2 years ago and they rented before then?

    What would be the circumstances if they bought another house due to moving to another area? What if they rented when they moved?

    Thanks.

    Linda F

    #2
    Moving before 2 years

    If they are moving for a job change and the distance test is met (same test as moving expenses) then they can take a reduced exclusion. # days lived / 730 x 500k (if filing joint). If they rent after they move they still get the exclusion.

    If they are moving just to move to another area then there is no exclusion.
    I would put a favorite quote in here, but it would get me banned from the board.

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