---
title: How Many Times Can I Claim Capital Gains Exemption?
description: Selling a home for a profit typically generates a capital gains taxable event. However, there are some exclusions. Read on to learn about the capital gains tax exclusion for primary residences and how often you can claim it.
image: https://www.realized1031.com/hubfs/how%20can%20i%20invest%20in%20real%20estate%20in%20tax%20free%20states%3F-1182617854.jpg
---

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# How Many Times Can I Claim Capital Gains Exemption?

Posted May 6, 2024

![how can i invest in real estate in tax free states?-1182617854](https://www.realized1031.com/hs-fs/hubfs/how%20can%20i%20invest%20in%20real%20estate%20in%20tax%20free%20states%3F-1182617854.jpg?width=750&height=392&name=how%20can%20i%20invest%20in%20real%20estate%20in%20tax%20free%20states%3F-1182617854.jpg)

Owning a home can be an excellent way to build wealth, especially over the past decade where home prices have made steady gains since the country exited the Great Recession.

Selling a home for a profit typically generates capital gains taxes. However, there are some exclusions. Read on to learn about the capital gains tax exclusion for primary residences and how often you can claim it. 

###  Home Ownership and Use Test 

According to the Internal Revenue Service, homeowners can qualify for an exclusion on any realized gains from the sale of a primary residence if they meet both the usage and ownership requirements.2 This exclusion is significant – up to $250,000 for single filers, and as much as $500,000 for married couples who file a joint return.  

- Usage test: You qualify for the exemption if you have used the home as your primary residence for at least two of the past five years. 

- Ownership test: You owned the home for a minimum of two years.  

These two-year periods don’t have to occur in the same time frame. For example, say you purchased an investment home five years ago but decided to live in it these past two years. You meet both requirements and qualify for a capital gains exclusion if you sell the home. 

When completing your tax return, you will need to report the sale of the home on Form 8949, Sale and Other Dispositions of Capital Assets if your taxable gains exceed the exclusion amount, or if you received a Form 1099-S, Proceeds From Real Estate Transactions in the mail from the IRS. You can expect a 1099-S when you sell your home if you don’t meet the exclusion requirements. 

It’s also wise to remember that you are only taxed on realized gains. If you bought your home for $400,000 in 2010 and sold it for $600,000 in 2022, there are only $200,000 in capital gains to account for. That number also could be lower if you made any capital improvements to the property, which will reduce your original cost basis in the asset. 

### How Often Can You Claim the Capital Gains Exclusion? 

You can exclude capital gains from the sale of a primary residence once every two years. If you want to claim the capital gains exclusion more than once, you’ll have to meet the usage and ownership requirements at a different residence. 

### The Bottom Line 

Homeowners can leverage the capital gains exemption multiple times provided they meet the qualifying criteria established by the Internal Revenue Service. Generally, if you own and live in a home for at least two years, you qualify for a capital gains exemption when selling the property. The new two-year period starts at the close of sale of your former residence. 

Consult with a certified tax professional if you still have questions about the capital gains exclusion when selling your primary residence.

 

*This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor.*     

*Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation.*  

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