Q: Owned home NC 14 yrs rented 11 yr. now reside pemntly. can I sell w/o beng pnlzd by resident laws? Capitol gains?

A: To answer whether the sale of your home qualifies for the federal tax exclusion, you should refer to IRS Publication 523 at https://www.irs.gov/publications/p523/ar02.html and talk to a qualified tax professional.

Your sale qualifies for exclusion of $250,000 gain ($500,000 if married filing jointly) if all of the following requirements are met:

You owned the home and used it as your main home during at least 2 of the last 5 years before the date of sale.

You didn’t acquire the home through a like-kind exchange (also known as a 1031 exchange), during the past 5 years.

You didn’t claim any exclusion for the sale of a home that occurred during a 2-year period ending on the date of the sale of the home, the gain from which you now want to exclude.

--More Than One Residence--

If you owned more than one home during the relevant time period, you must also consider the "facts and circumstances test" to determine whether this residence was your primary residence, which basically asks: do you consider this to be your primary address (is it the address on your voter registration/tax returns/driver's license; near where you work; where your family lives).

--Business or Rental Use of Home--

Determine whether the space used for business during the 5 years before the sale is considered to be within your home or not. If the business or rental space was physically part of the living area of your home, such as a spare room used as a bed-and-breakfast bedroom or attic space used as a home office, your business usage doesn’t affect your gain/loss calculations. Complete How To Figure Your Gain or Loss Worksheet .

If the business or rental space wasn’t within your living space, such as a first-floor store with residence, an apartment with its own entrance (and kitchen and bath), or a working farm with a farmhouse on the property, continue to Determine whether the business or rental space still counts as a business space , next.

Determine whether the business or rental space still counts as a business space. A space formerly used for business is considered residence space if ALL of the following are true:

You weren’t using the space for business or rental at the time you sold the property,

You didn’t earn any business or rental income from the space in the year you sold your home, and

You used the space as residence space for 2 years out of the 5 years leading up to the sale.

If all of these are true, your business usage DOESN’T affect your gain/loss calculations. Complete How To Figure Your Gain or Loss Worksheet and then go to How Much Is Taxable , later.

For more information about using any part of your home for business or renting it to someone, see Pub. 587, Business Use of Your Home, and Pub. 527, Residential Rental Property.