One of the best tax benefits homeowners should know about is IRS Section 121, the Primary Residence Exclusion.
Here’s the basic idea: if you owned and lived in your home as your main residence for at least 2 of the last 5 years before selling, you may be able to exclude up to $250,000 of profit if single, or up to $500,000 if married filing jointly. The IRS says the 24 months of residence do not have to be one straight block of time.
That means you may be able to live in the home, move out, rent it for a period of time, and still qualify — as long as you meet the ownership, residence, and look-back rules. The IRS also says you generally can only use this exclusion once every 2 years.
One important warning: if the property was used as a rental, depreciation may still have to be recaptured and taxed, even if the main gain qualifies for the exclusion.
This is why planning matters. Buying, living in, improving, renting, and selling real estate can create major wealth — but the tax rules can make a huge difference.
Brett Young — Key Realty LTD
📞 216-703-5740
🌐 https://www.clevelandincomerealestate.com/
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Thank you