Re: Captial gains tax on rental…sell NOW??? - Posted by The Baze
Posted by The Baze on April 04, 2000 at 06:35:55:
Yes, the section 121 exclusion applies to homes that were your principal residence for at least 2 of the previous 5 years. If you sell in 2000, then it will fall into that category. If you wait til 2001, then you lose the year 1995, and you lose the exclusion. BUT, be aware, even if you sell now & get the exclusion, you still have unrecaptured section 1250 gain, and that will be taxed at 25%. Basically, all the depreciation you’ve claimed on the property will now be taxed at 25%. Also, if you take the exclusion now, you can’t take it again for 2 years, so if you’re unsure what you may do w/ the house that is now your principal residence, keep that in mind.