Father-in-law owns his house but moved to an assisted care facility 2 years ago. After 2024, the 2-out-of-5 rule will take effect. Are there any exceptions to avoiding capital gains tax after 2024? He won’t need the proceeds from the sale yet to pay for his assisted living. He can’t live on his own but we also want to keep the property in the family. He is starting hospice care in the facility soon. Thanks

My wife a d I bought a large lot to build our home in December, 2020. We moved into the house in January, 2022. We have now lived in the house for 18 months. We are thinking of moving out of state. Can we claim “ownership” since we bought the lot? Do we qualify for 75% of our gains ($150,000). We sold our last house in September of 2021 and will make sure escrow closes on our sake after two years. Thank you

Btw, what city/town is the mobile home park located in?

There is no similar tax break for rental property. The exclusion benefit described here only applies to primary residences. For rental property, your main tool is to defer gains with a 1031 exchange, or possible to sell on creative finance.

What city/town and state is your rental property located?

If you are joint tenants, I think you are responsible for half the gains (assuming there were only 2 people on title). Your mom’s half actually gets its basis stepped up to fair market value upon death, wiping away half the tax liability, i.e., if you sell it now, half of it would have no capital gain. If your mom had been the sole title holder, then all of it would have no capital gain, but if you are joint tenants then you technically own half.

Do you have a similar article on the tax ramifications of sale of rental property?

Thanks, Mike

I bought a piece of land 04/25/2014 on which to eventually build a residence.
I built a residence in 2019 and on 12/27/2019 I acquired a Certificate of Occupancy for the residence.
I used the residence as a second/vacation home from 12/27/2019 until 07/23/2020.
I never rented the property or deducted depreciation, though I took a credit for solar improvements for the second residence.
I sold my house elsewhere and used the property as my primary residence from 07/24/2020 through 07/27/2022.
Since 07/28/2022, it is being used as a second/vacation home.
I am planning to sell the property and want to exclude the gain as a sale of my primary residence.
Possible? Factors? Time periods?
Supposedly, I have to take into consideration the time I owned the land before it was my principal residence, when it was only vacant land, into the gain equation.
Hopefully, my question and your answer, regarding conversion of land held for investment into a primary residence and then sold, will benefit others.
Thank you, Andrew!
Jimmy D.