Date: Tue, 19 Jul 2005
I have lived in my home over six years. I rented it the first 4 1/2 years, then purchased it on 12/15/03. Must I defer the closing of the sale of the house until two years have passed - 12/15/2005, in order to be exempt from capital gains taxes?
Thank you very much for your help!
Date: Mon, 08 Aug 2005
Yes (but hold the house until at least 12/16/2005), unless you meet one of the "reasonable cause" exceptions for a prorated exclusion. The house must have been owned and used as a principal residence for more than two years during the five years before the sale.
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