Qualify for capital gains tax exemption more than once?

Guest 0.10 Dollars($)

Is it possible to take advantage of the capital gain tax exemption of $250,000 for more than once? Supposing that one buys it in 1999 and sells in 2002 for $200,000 gains. And then again buys a property in 2003 and sells it in 2006 for another 200,000 gains?

adonis · Posted: Mon Dec 18, 2006 12:20 am Post subject:

Yeah, you can very well get the tax exemption more than once.

Guest 0.10 Dollars($)

But my knowldege says that one cannot qualify for the exemption more than once in every 2 years. So, if you have already got an exemption from capital gains tax within the past 2 years, then you will have to pay taxes on your gains.

Caron

Hi Stark,

In order to exclude gain and avoid paying capital gains taxes, a taxpayer must have owned and used the property sold as his primary residence for 2 of the 5 years before the sale. The time period of owning and using the property may not be the same but it has to be included within 5 years prior to the sale.

The 2 years may comprise of 24 full months or 730 days. Short absences such as vacations are counted as period of use of the property but long breaks are not. The tax payer should not have excluded gain on another home sold during the 2 years before the current sale of property.

Thanks,

Caron.

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