When the 24 months of of residency for capital gains exemption begin?

Question

I plan to make settlement on my house on August 1, 2007. I have lived there since July 28, 2005. I sold my previous home on August 14, 2005 and received the capital gains exemption because I have there since Juyl 2002. Will i still receive the expection for the August 1, 2007 sale?

Answer 1

You can use this exemption every 2 years assuming you lived in the property 2 of the last 5 years. You should be fine to do this again.

Answer 2

Nope, since you already used the exemption within 2 years. You must hold off on closing until August 15, 2007 to get the exemption.

You must meet the 2 of 5 rule (which you just do) and NOT have used the exemption within 2 years (which you HAVE) so you are not eligible for the exemption on this sale if it closes before August 15, 2007.