Can I still apply the principle residence exclusion if I rent my home?

September 13, 2006

From:  Niles
Date:  Wed, 05 Apr 2006

I will have owned my principal residence in Boston for two years in August. If I started renting the home after August, would I lose the exclusion for sale of a principal residence? What if I started renting the home before August?

Answer

Date:  Fri, 05 May 2006

Hello Niles,

If you started renting the home after owning and using it more than two years, you would have three more years during which you could claim the exclusion. The requirement is that you used the home as your principal residence for two years or more during a five-year period ending on the sale date.

If you start renting the home before August, you will lose the opportunity to qualify for the principal residence exclusion, unless you move back into the property at a later date.

Good luck!
Mike Gray

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