2

I’ve owned a property for 2 years exactly. I’ve lived in it for just over 12 months and have rented it out for 12 months so far.

I want to understand if I would pay taxes if my gain was under $250,000. If so, how much? Is it 30% of the gain? I’m confused because everything I’ve been reading talks about 2/5 years rule but what I’ve only had the property for 2 years total. Thank you.

5

The 2/5 means you had to live in it for 2 of prior 5 years.

You did not do that, you turned it into a rental after 1 year. The gain exclusion does not apply to you.

| improve this answer | |
  • I thought the 2/5 year "loophole" was closed in 2009. – Atsby May 4 '15 at 8:35
  • I added an IRS link to my answer. No, the rules weren't changed in 2009. – JTP - Apologise to Monica May 4 '15 at 9:43

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