We don't have any agreements on the mortgage payoff. "split the gain" should be after all the mortgage is paid off right?
Since there are 2 owners (not spouses), can we both claim 250/500k exemption? Or how does it work in my case?
From investopedia
KEY TAKEAWAYS
- - You can sell your primary residence and be exempt from capital gains taxes on the first $250,000 if you are single and $500,000 if married filing jointly.
- - This exemption is only allowable once every two years.
- - You can add your cost basis and costs of any improvements that you made to the home to the $250,000 if single or $500,000 if married filing jointly.
Trying to understand this a little better for my investment knowledge. I need to live in the property for 2 years, but do I need to own the property for 5 years to qualify for the exemption? Say for example, given the following scenario:
1. in 2016, I purchase my first property and live there for 2 years
2. in 2018, I purchase the second property and live there for 2 years as well
3. in 2020, I purchase the third property and live there 2 years also
4. 5 years after I purchase the first property, in 2021, I sell the house and claim the 250/500k exemption
5. 2 years after I purchase the third property, in 2022, I sell the house. Can this house be exempted again?
6. 5 years after I purchase the second property, in 2023, I sell the house I purchased in 2018. Can I claim the exemption on this also for another 250/500k?
Basically, is the exemption every 2 years up to the first 250/500k (like a lifetime threshold)? Or is it the first 250/500k capital gain every 2 years?
