If you sell a single family home for a profit is the profit taxed if you do not buy another home within a year

Answer 1

Since so many facts apply to buying and selling family homes when it comes to the IRS it's best that instead of me spouting off all my opinions I give you the links that provide you with the exact answers and the contradictions of the exact answers from the IRS. Go research these links.
IRS: Selling your Home Publication: http://www.irs.gov/publications/p523/index.html and http://www.irs.gov/publications/p523/ar02.html
IRS: Home Sale Exclusion rules, publication: http://www.irs.gov/newsroom/article/0,,id=105042,00.html

Happy Holidays and Buena Suerte

Answer 2

You are referring to capital gains taxes, I think. You will not be taxed on the profit unless you do not buy another home for the same price or more within TWO years.

You have some choices. You can turn the property into a rental which would put you into a different category and change the capital gains thing, I think, get legal advise on that one. Call the IRS, or the Board of Realtors locally.

Or you can use your ONE time $250,000 ($500,000 if married) deduction for capital gains for this but if you are young, you might want to save this one for later.

Best bet, find a way to buy another home within two years. Remember, the longer you wait, the higher the prices for homes so you might get less for your dollar.

Answer 3

If you lived in the house for at least two of the last five years, then: If single, up to $250k of profit is tax exempt. You don't have to ever buy another house if you don't want to. If married filing together, up to $500k of profit is tax free - again, no need to buy another house ever. You can do this as many times as you want. Buy low, live there two years, sell high, no taxes, repeat, repeat, repeat.

If you did not live in the house for at least two of the last five years, then it's considered an investment property. You can defer (not eliminate) taxes by doing a 1031 tax exchange. You sell this house - the money can't be released to you, it must be held by the 1031 "exchanger" (can't think of the right term right now). You have to buy another similar type property within a certain time frame (I think it's one year, might be less) Thus, you are "exchanging" one investment property for another, as opposed to "selling" an investment.

Answer 4

The profit on the sale of your single family home is taxable on the tax returns (federal and state) for the year in which the home is sold. However, if you are single, $250,000 of the profit is exempt from federal income tax ($500,000 if married). Whether or not you buy another home does not affect your taxable profit.

Answer 5

Like the other guy said, talk directly with the IRS. Be careful too. Supposedly, a person is allowed to sell a property once in a lifetime without being taxed or taxed heavily. My 89 year old grandfather was forced to sell his farm to pay nursing home costs. He was not allowed the exclusion in spite of obviously being eligible. I guess they wanted the money more than the nursing home.