Can I avoid How can I avoid paying capital gains taxes on a house I've lived in for 18 months?

Question

I want to move before the 2 year "residenancy" period, but am willing to pay the mortgage on the house while renting another place to live until the 2 years is up. Also, what unforeseen circumstances qualify for capital gains tax exclusion? Does having a baby and not being able to afford to stay in the house qualify? The bottom line is I am deseprate to move but don't want to screw myself by owing Uncle Sam a huge amount of money on my home sale.

Answer 1

If you make a huge profit on the sale of the house, then you will owe huge taxes.

If you take your profit and reinvest into another property, you will not owe.

Unfortunately, Uncle Sam does not care about your family life or any other unforeseen circumstances.

Good luck!

Answer 2

I would look into a 1031 Exchange. It allows you to put the money you made from the proceeds of the sale into an account for future use of buying another property.

Answer 3

I believe if you move before the 2 years is up and you try to sell the house, you'll pay those significant taxes on it! Even if you own the house for more than two years but live in it less than those two years, you pay! I would recommend asking an attorney or adviser for more info.

Answer 4

Stay in the house another six months.
You might be able to find a financial partner who would help you stay in the house, and in exchange, you'd pay him something afterward that would be less than you would have had to pay Uncle Sam.

Good luck.

Answer 5

If you plan to buy another house, you may be able to escape capital gains altogether, if you qualify for a tax-free exchange. You need to see a tax accountant, they will explain it to you.

Answer 6

look into a 1031 exchange

Answer 7

You must not sell the property to soon.