Im selling a house and want to know how long I have to reinvest before i have to pay capital gains tax on that money????
also what are the guidelines for the reinvestment?
2007-02-28 09:25:34 · 8 answers · asked by sean_4767 1 in Business & Finance ➔ Taxes ➔ United States
The old rollover replacement rule was tossed about 10 years ago. You can no longer do that.
It was replaced with what is a FAR better deal for most people. If you lived in your home for 2 of the 5 years immediately prior to the sale you may be able to exclude some or all of the gain from tax forever! The limit is $250,000 for a Single filer or $500,000 for Married Filing Jointly. You can do this once every 2 years.
If you have more gain that that, or if you don't qualify to use the exclusion, you must pay tax on it in the year of the sale; you can no longer roll the gain over into a more expensive residence.
2007-02-28 10:11:51 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋
The rule about reinvesting the money from a house sale is long gone - now there's no such requirement.
If you lived in the house for two of the five years prior to the sale, and owned it for two of those same years, you can exclude up to $250K of gain ($500K if married filing a joint return) from taxes, as long as you haven't taken the exclusion within the prior two years.
If you don't meet the two year rule, under some conditions like a sale for a job move or health reasons, you can prorate the gain by the portion of the required 2 years that you DID live there.
2007-02-28 11:43:09 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
time limit reinvest money sale home capital gains imposed
2016-02-01 02:59:46 · answer #3 · answered by ? 3 · 0⤊ 0⤋
Federal capital gains become long term after the first year...when I sold 1st house there were no capital gains if buying replacement home w/in 18 mos. Check with IRS.. very well could be major changes...
2016-03-16 02:13:17 · answer #4 · answered by Anonymous · 0⤊ 0⤋
If its a personal residence, two years; but you still have to report the sale on your current Form 1040, indicating that you plan to repurchase within the two year period.
If its an investment, you need to do a Section 1031. Pleasse consult a real estate attorney and CPA to assist you.
2007-02-28 09:32:49 · answer #5 · answered by bold4bs 4 · 0⤊ 2⤋
Two years.
2007-02-28 09:31:20 · answer #6 · answered by Ronatnyu 7 · 0⤊ 2⤋