No, that will take a little research on your part. I was just pointing out the 5 year ownership and use test for the exclusion, based on you stating the 4 year ownership. 4 years does not qualify them for the exclusion

T

TaxGuyBill

Level 15

If it was NOT a main home AFTER a period of not being a main home, yes, it would qualify.

In other words, (1) it they bought it, (2) immediately made it their main home, (3) rented it out AFTER it was a main home and (4) did NOT make it their main home after it was rented, it would qualify.

The exclusion does not cover the depreciation.

L

lihe0402Author

Level 3

Hi Bill,

Thank you for the reply. Why (4) though? My understanding is that the residency test only requires 2 years and it does not have to be in the same time block. If year 1- main home, year 2-3, rental, year 4- main home, it won't qualify?

Thanks again for your help!

rbynaker

Level 13

See Section 121(b)(5).

https://www.law.cornell.edu/uscode/text/26/121

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