Capital gains exemption new construction primary residence

[Brett Fulgoni]

Hello, we purchased a lot 2 years ago, and are building our primary residence. We started construction 1 year ago and almost complete. We have been living on the property since construction started. When does the clock start for the 2 years primary residence capital gains exemption? From C of O or when I moved onto the property/began construction? Thank you for the advice!

[Eamonn McElroy]

Sec 121 requires ownership and use.  If you were not living in the house, how are you going to argue that you were using it as a residence?  Especially if it was not in habitable condition (e.g. raw land or under construction).

The clock starts when you move in and begin using the property as a residence.

@Ashish Acharya

Gates is distinguishable from OPs facts.  Even if it wasn't, we should be skeptical of the findings in that case.  It was appealed, docketed, and never made it to trial.  The appeal mysteriously went away.  That should tell us something.  Read the dissent in that case, which I agree with and give more weight to.