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Updated over 12 years ago, 08/12/2012
2 Year Rule for Capital Gains on Rental Prop
I purchased a property in California several years ago and lived in it as my primary residence for around 3 years. It is currently rented out and I am thinking about selling next year when my tenants lease is up. When the lease ends, it will have been about 35.5 months since I moved out and converted it to a rental. If I can get a quick sale I'll avoid the capitals gain tax, but that may not happen. Do I need to move back in until the property sells to ensure that I maintain it as my primary residence for 2 out of the 5 years up until the date of sale? Is there any leeway in terms of having the home on the market (and not used as either a rental or primary residence) when calculating the 2-of-5 years for the capital gains exemption? Thanks.