Taxpayer has flipped a few personal residences over the years and has received gain exclusion. In 2018, sold personal residence 3/18/2018 and meets the ownership, use tests (purchased residence on 3/13/2016 and moved in on that date and lived in it until 3/18/2018). But doesnt't appear to meet the 2 year frequency test as follows. In 2016, taxpayer took a personal residence gain exclusion for that year and met all tests; however, the sale on the 2016 residence exclusion was on 5/20/2016, which is less that two years from the 2018 residence sale of 3/18/2018. Therefore, the 2018 sale gain would not be excluded. Is this correct or am I missing something? Thank you.
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JDW, your understanding is correct. The second sale occurred lass than two years before the last time a gain exclusion was used for principal residence. Taxpayer cannot exclude the gain. -
Why did they move? If they moved for a qualifying reason, they may qualify for the reduced maximum exclusion.
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Thanks for the replies. Unfortunately, they don't meet any of the reasons for the reduced maximum exclusion.Comment
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