I had Calhfa loan; my house was sold within 2 years. No recapture tax applied but should I pay capital gain?

Question

I sold my house within 2 years of residency. I had Calhfa loan. I know I don't have to pay recapture tax because my income doesn't exceed the adjusted income limit. Should I pay capital gain though (Schedule D form 1040)?

Answer 1

If you didn't meet the 2-year ownership and residence requirements, than you'll owe capital gains tax on any gain.

If you sold because of a job move, health issues, or other unforseen circumstances that the IRS accepts, you might be eligible to exclude some or all of the gain, but the $250K allowance ($500K if filing joint) would be reduced.