A capital gain can be realized on stocks, bonds, mutual funds, and even real estate. The rules for capital gains on a primary residence are considered testable, so remember the following:
If over the previous 5 years you:
- owned the property for at least 2 years (the period does not have to be continuous)
- used the property as your primary residence at least 2 years (does not have to be continuous)
- during the 2-year period ending on the date of sale, you didn't exclude cap gains on a primary residence
you can exclude up to 250K of cap gains on the sale of the house. For married-filing-jointly, 500K of cap gains can be excluded.
