u/MJBLCDR

Ok tax mavens, I need some help.

Question: do I qualify for capital gains exclusion on the sale of my home?

Details:

1. Married filing jointly
2. I lived in a house from January 2018 through July 2020. I was on active duty.
3. Left the house in July 2020 at which point I rented it out. My orders were still in this location but I moved out to get the property ready for rental.
4. I moved abroad on military orders September 2020 and was at least 50 miles from this house until July 2024.
5. I left military service in July 2024. I moved somewhere far from the house and do not plan to live in it again. I’ve been a civilian since this time.
6. The house was rented continuously from 2020 until now, and still is.
7. I’m considering selling in July or August of 2026

My research seems to indicate that I qualify for an exclusion of capital gains tax based upon the following rule: Section 121(d)(9). I understand I’m still on the hook for depreciation recapture.

My CPA had not heard of this and is not optimistic that I meet the requirements.

Can someone help?! Thank you. This is a major tax decision point for me.