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Old 09-14-2015, 11:00 PM
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Gain on sale of principal residence

I'm trying to do some tax planning for 2015 and had a few questions.

I sold my rental property in 2014 and took the 10k loss on the sale of that property on my 2014 taxes. Not sure if I took the entire loss in 2014 or if I have any loss carry forward to future tax years.

In Oct 2015 I might be selling my principal residence property I got from my mothers estate when she died in Oct 2012. I moved into this property in May 2013 and it became my principal residence at that point. In Aug 2013 I officially moved it from my mothers name and financed it into my own name under a VA principle residence home loan.

In July 2015 I purchased a new home and officially moved into that residence on Sept 1 making it my new principal residence.

My question is twofold:

1). The cost basis (after improvements) of the house sold in 2015 is 182,000 and the sales price is 230,000 making a gain of 48,000 showing on my 2015 taxes. I read that gains are excludable up to 250,000 per individual provided they are selling their principal residence that they have lived in for 2 years. Did my official principal residence start in May 2013 when I moved in when the house was still in my mothers name or in Aug 2013 when I financed it into my name? If it started in Aug 2013 do I still meet the two year requirement if I purchased a new principal residence but did not move into it until Sept 2015?

2). Does having a loss on the sale of rental property in 2014 disallow me of excluding my principle residence gain on sale in 2015? Or force me to net the 2014 loss and 2015 gain?

Thank you for your help



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Old 09-15-2015, 10:39 PM
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As long as you owned and lived in it 2 of last 5 years prior to selling it and did not already exclude gain on a sale of principal residence in last two years you can exclude gain. Loss on a rental house in prior year has no bearing.



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