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Updated almost 5 years ago, 03/03/2020

User Stats

1,888
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1,045
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Jack B.
  • Rental Property Investor
  • Seattle, WA
1,045
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1,888
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People seem to misunderstand the 2/5 year rule here

Jack B.
  • Rental Property Investor
  • Seattle, WA
Posted

Every other day I see it posted in a thread, even in response to some of my own. It's like people are hard of reading or just parrot what they hear someone else say in a single sentence on the forums, further spreading this misinformation...

The 2/5 year rule has it's limitations. You can't rent the house out forever and then move back into it for 2  years then expect a full capital gains exclusion. Even if you lived in it before, then rented it out for 6 years, then move back in. It is still pro rated based on qualified and non qualified use...

Read this: 

https://www.merriman.com/wealth-preservation/planning-on-moving-back-into-your-rental-in-the-future-read-this-first/