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Why Timing Is Everything When Selling Your Home
There’s a little-known IRS rule that continues to blindside homeowners—and it could have six-figure consequences if you’re not careful.
As a former CPA and now a full-time Global Real Estate Advisor, I make it a priority to educate my clients on both the financial and lifestyle implications of selling a home. And this one often slips under the radar: the capital gains tax exemption on your primary residence.
The rule is simple on the surface—yet packed with nuance that most people don’t find out until it’s too late.
To qualify for the $250,000 (single) or $500,000 (married) capital gains exemption when you sell your primary residence, the IRS requires that you:
- Owned the home for at least two years
- Lived in it as your primary residence for at least 2 of the last 5 years before selling
Here’s the part most people miss:
- Those two years don’t need to be consecutive
- But the five-year clock doesn’t stop ticking once you move out
So, if you moved out in 2021, the clock has already started—and if you don’t sell before your five-year window closes, you could lose that exemption completely and owe tax on gains that might have otherwise been tax-free.
This happens more often than you think—especially to those who’ve moved into second homes, inherited property, or held onto homes during life transitions.
A Note from My Desk
I’ve had this very conversation multiple times in the past month. If you’re even thinking about selling your home this year or next, this is something to put on your radar now, not later.
Every homeowner’s situation is unique. That’s why I blend my CPA background with a strategic approach to real estate—offering clients more than just market insight. It’s about protecting what you’ve built, maximizing your return, and avoiding costly missteps.
If you have questions about your timeline or want to explore your options, I’m always here to help—and can connect you with a qualified tax professional for further guidance.
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