Capital gains on rental?

[Edgar Martin]

Hi BP, I have currently owned my property for 6 years and am curious to know if I rent it out for one year, then sell, will I have to pay capital gains since it's been rented for less than two years? Or, since I have already owned for so long, could I avoid capital gains on renting it even if renting for one year? Thank you in advance.

[Michael Seeker]

Hey @Edgar Martin - you must have owned and lived in the home as your primary residence at least 2 of the last 5 years to be able to forego taxes on $250K single/$500K married of capital gain.  Given what you've described, you should be fine renting the house out as long as you sell within the next 3 years (so last 2 years count towards owner occupancy).

https://www.irs.gov/publications/p523/ar02.html