Question regarding Section 121 Exclusion

[Oliver Martin]

Hello everyone.

I have a question. I bought a primary residence in September 2012 and lived there until December 2015.

The house was held as rental property from January 2016 to September 2019. (3 years and 8 months)

If I move back to the property on October 2019 and sell it on November 2021 (2 years), am I qualified for the section 121 exclusion?

Does the non-qualifying use only apply if the property was originally purchased as investment/rental and was later converted to primary?

Thank you.

[Wayne Brooks]

@Oliver Martin Correct....once you moved out for more than 3 years, you lost the 121 Total exclusion on that house forever.  If you moved back in, you’d get the prorated Qualified exclusion...approx 51 month’s exempt (45ish %) 56 months non exempt.