Jim, We Just Sold Our Home. We Lived In It For 7 Years, But Then We Rented It Out For One Year Prior To Selling. Is Our Gain Of $100,000 Subject To Capital Gains Taxes or Not? I Can't Seem To Get A Straight Answer From Anyone.
I am not sure why you would be having such a difficult time getting an answer to this question. Quoting from IRS Publication 523:
“To exclude gain under the rules in this publication, you generally must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale.”
If you lived in the property for 2 of the most recent five years, your gain would not be subject to taxes. If you have taken depreciation for the one year you rented out the home, you would have to recapture that, which is something to discuss with your tax preparer.
The good news is, that you should not owe any taxes on your gain based on the information you have provided in your e mail to me. For more information, go to this link IRS Publication 523
Agree or disagree, click on comments below.
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