Sale of House Built

[bekzm]

A young couple built there house and now have a chance to sell it over $500,000. My question is when does the 2 years start. When the couple purchase the land to build the house OR when they finish the house to live in? The extra months could determine the capital gains. Does the exclusion apply also to the land purchased or house built.
Can any clarify this.
Thanks for all your support

[Gene V]

TTB 6-19
Construction. If a home is built, basis includes:
1) Cost of the land, and
2) Cost to complete the house, including:
a) The cost of labor and materials. This does not include the
value of the taxpayer’s labor or the value of any other labor
that was not paid for.
b) Any amounts paid to a contractor.
c) Any architect’s fees.
d) Building permit charges.
e) Utility meter and connection charges.
f) Legal fees directly connected with building the house.

The two years start when the coupe moves into the finish home.

[bekzm]

Thanks

That is what I told them to figure the capital gain which is a difference of $200k so will pay taxes on that right.

[thomtax]

There are some provisions for taking a reduced exclusion. Look at TTB 6-21 for clarification.

LT