OK, I'm a real estate broker but don't know the tax code well enough to make this decision.
1. I own a home that was a principal residence for 2 years
2. I let a friend stay there and pay the mortgage (did not file anything with IRS) after I'd lived there 2 years. I held the house to increase equity and didn't know when I'd want to move back.
3. When my friend moved in, I bought another house to live in & have been there for 1 year.
I'm wanting to sell my "new house" and move back into my old house. Can I sell my new house and being that it's over 1 year since ownership, pay the 15% real estate tax to the govt and call this investment property. Then when I sell the old house (probably about 4 months from now) still claim that as a principal residence for the past 2 out of 5 years and walk away tax free?