Temporarily Renting a Home
Posted by Mary Cox on
IRS has provisions for homeowners regarding the sale of a principal residence that allows for temporarily renting the home without losing the ability to exclude the gain if the home is sold under the correct conditions.
The rules for the exclusion of gain on the sale of a principal residence are:
- Up to $250,000 of gain may be excluded for single taxpayers and up to $500,000 for married taxpayers filing jointly.
- Ownership and Use must have been a principal residence for two of the five years preceding the date of sale (closing date). This allows for a temporary rental for up to three years maximum.
- Either spouse may meet the ownership test.
- Both spouses must meet the use test.
- No exclusion has been used in the previous 24-month…
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