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Personal Residence Turned Rental and Sold for Military Leave

  • 1.  Personal Residence Turned Rental and Sold for Military Leave

    Posted 04-13-2023 01:53 PM

    Hey All,

    I have a client out in California whom owned a home in California; he only owned the home for a year and a half and was only able to live in it for only 3 months because he was deployed for military leave. It was intended to be his primary residence. He then rented out the property while he was on military leave (about a year) and continued renting it until it was sold in August of 2022 (he arrived home I think March or April 2022 and stayed in an apartment due to cash flow from the rental.) It was purchased in March of 2021. Being that 1) he did not live in it for 2 years 2) rented it and 3) continued to rent it, makes me think there really isn't much of a way or reason to exclude any of the sale, but military orders there are usually some exceptions. Does anyone know if it would be possible to exclude any of the gains in this scenario? My assumption is no but I could see there being an argument for the first few months before going on military leave being eligible since military orders have exceptions to the normal tests



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    Matthew R. Savello, CPA
    Prestige Tax & Accounting, LLC
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