Primary Residence sale gain is tax exempt if lived there 2 of last 5 years

[LagoonGator68]

SaleIRC section 121 allows a taxpayer to exclude up to $250,000 ($500,000 for

IRC section 121 allows a taxpayer to exclude up to $250,000 ($500,000 for certain taxpayers who file a joint return) of the gain from the sale (or exchange) of property owned and used as a principal residence for at least two of the five years before the sale.Sep 30, 2002
The Home Sale Gain Exclusion - Journal of Accountancy

 

[LagoonGator68]

Publication 523 (2018), Selling Your Home | Internal Revenue Service

 

[Bushmaster]

Is there a question here or a just a heads up?

 

[LagoonGator68]

Is there a question here or a just a heads up?

Heads up primarily to BNA and Detroit who were talking about 1031 exchange to avoid tax on gain in the box.

 

[78]

I doubt they were talking about the primary residence, although it's common knowledge that BNA paid in the millions for his abode.

 

[LagoonGator68]

I doubt they were talking about the primary residence, although it's common knowledge that BNA paid in the millions for his abode.

It is his primary residence.

 

[78]

It is his primary residence.

With the caveat that your primary residence is used as a rental property for two years before you sell it.

 

[Bushmaster]

With the caveat that your primary residence is used as a rental property for two years before you sell it.

There would be depreciation recapture at ordinary income rates before Sec 121 kicks in. If he is paying millions for a primary residence, I hope he has a good tax advisor he can lean on.

 

[LagoonGator68]

With the caveat that your primary residence is used as a rental property for two years before you sell it.

are you talking about?

 

[Swamp Donkey]

I remember why I got a C in tax law now.

 

[78]

are you talking about?

Lol, playing. It's all in good fun.

 

[Detroitgator]

I thought he was above the exemption when I mentioned 1031

 

[EyeDocGator]

I remember why I got a C in tax law now.

You were lucky they graded on a curve.