trueworkingclass t1_jeajdsv wrote on March 30, 2023 at 4:41 PM

Yes, there is a significant tax penalty for selling a house you've owned for less than 2 years. This penalty happens because you will have to pay capital gains taxes on any profits from the sale of the property, even if it was your primary residence. Here are the implications if you sell your home too soon.

The penalty for selling a house before living in it for 2 years is that you won't qualify for the capital gains tax exemption, and you will have to pay a capital gains tax on any profit. If you've owned the home for over 1 year, but under 2 you'll pay long-term capital gains, while if you've owned it for less than one year, you'll pay short-term capital gains taxes.

downup25 OP t1_jealob5 wrote on March 30, 2023 at 4:56 PM

Thanks for the reply.

I understand the standard two year rule. What I'm referring to are the unforeseen circumstances safe harbor that allows you to sell your house before two years and partially claim the capital gains exemption.

I've read online that a new job qualifies as an unforeseen circumstance, so I'm trying to understand if starting your own business similarly qualifies.