We live abroad. If we would sell out primary residence in another year or two, how to prove that it is our primary residence so we are exempt from tax on the sale? Currently, we are renting it out to someone else.

What bills or whatever should be be keeping?

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    Doesn't that amount to tax fraud ?? Committing fraud is outside the purview of this forum. – DumbCoder May 9 '18 at 10:09
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    The countries involved should be specified, because the meaning of primary residence and the impact could differ from country to country. – mhoran_psprep May 9 '18 at 10:20
  • @DumbCoder what gave you the impression that there is fraud? Anyone who wants to legitimately avoid taxes will need to prove it. If the residence is in another country, what does the IRS want as proof in order not to ask for capital tax on the sale. One is allowed to rent it out and not need to pay tax if they lived there 2 of 5 most recent years prior to the sale. Are you getting this? – user1422331 May 9 '18 at 12:50
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    @user1422331 Stop going bonkers. Your query in it's current form looks like tax fraud. As an OP it is your duty to clarify the reasons you want to do this. Without all the details you mentioned in the comment, your query pertains to tax fraud. You live somewhere else but want to claim primary residence of the property What does that mean ? – DumbCoder May 9 '18 at 13:37
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    @user1422331 To expand on what DumbCoder says: a simplistic definition of "primary residence" wouldn't (I think in many people's view) cover a property you're renting to someone else. So trying to prove it is your primary residence could be "suspicious". If a certain jurisdiction's definition of "primary residence" happens to include a rented house (if you're living abroad), then you should at a minimum specify that jurisdiction (with a tag) and ideally include what you already know about that definition (e.g. the 2 of the 5 most recent years). – TripeHound May 9 '18 at 14:34

Supporting documentation for primary residence include utility/other bills addressed to you at that address, tax returns bearing that address, vehicle/voter registration, you can also get affidavits from neighbors.

A mix of those combined with the fact that your tax returns indicate when it was placed into service as a rental make the timeline obvious to the IRS.

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