real estate capital gains?

Question

If I sell my primary residence(only property I own) in less then 2 years from date of purchase, and use that money to buy a new house, will I have to pay capital gains?

Answer 1

Your best bet is to consult an accountant for guidance on this as they will have the most current IRS info.

If you are just selling outright, yes the 15% cap gain rate is applicable provided you held it 12 months plus one day; if less than a yr then it is your ordinary income tax rate. If 2+ yrs and within a 5 yr window you may still claim the exemption.

In other words it may be worth your time to rent a short term or buy a replacement home but keep this house as a primary residence until you meet the residency requirement, then sell and you can then downsize if you like w/o potential tax repercussions..

Answer 2

Yes, you would be subject to capital gains tax. To be eligible for the $250,000 ($500,000 if married) capital gains exclusion you must reside in the home for 2 years. Talk to a CPA about your specific situation.

Answer 3

As accepted whilst somebody says "somebody instructed me", that somebody replaced into incorrect - and quite some, some years old. That rule has been long gone for years (you moreover mght had to be sixty 5), replaced by the rule that in case you owned your place and lived in the domicile as your important domicile for 2 years of the 5 ideal in the past the sale, as much as $250K of earnings, $500K on a joint return, isn't taxed. you may purely use this exemption in case you havent used it in the final 2 years.

Answer 4

The above answer is correct. The old rule that allowed you to roll your gains into your new home went away in 1997.

Answer 5

If you are moving for health, financial hardship or employment reasons, you may be eligible for exemption. You don't always need a two year rule in such cases. Ask your tax advisor. He/she will tell you about the requirements.