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Is there a penalty for selling a home in less than 2 years?

November 23, 2005


Subject:  tax question
From:  Gisella
Date:  Thu, 27 Oct 2005

Greetings,

Thank you for providing a great informative website. I have lived in a single-family home for 19 months. Is there a penalty if I sell the home before I have lived in it for more than two years?

Much appreciated, Gisella

Answer

Date:  Mon, 07 Nov 2005

Hello Gisella,

In order to qualify for the $250,000 per individual exclusion for sale of a principal residence, you must live in the home for more than two years. Sometimes you can get a prorated exclusion if the home must be sold early for unforeseen circumstances. Maybe you can just hold on for five more months?

Good luck!
Mike Gray

We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this website was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.

Is there a penalty for selling a home in less than 2 years?

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