Will I have to pay capital gains on my recent principal residence if I moved three years ago?

August 21, 2008

From:  Patrice
Date:  12 Jun 2008

I have a home in Maryland that I’ve owned since October 1999. I had to move to Missouri in August 2006 to take care of my grandmother. I began renting my home in Maryland in September 2006. I purchased another home in Missouri in December 2007. Will I have to pay capital gains tax if I sell my home in Maryland in 2009?

Answer

Date:  03 Jul 2008

Hello Patrice,

If you sell the home before August 2009, you should qualify for the exclusion. You must have used the home as a principal residence for more than two years out of the five years before the sale to qualify. From your explanation, you should have qualified for the years ended July 31, 2005 and July 31, 2006.

Good luck!
Mike Gray

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