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Deductions & credits
The sale of property, even a home, is a standalone transaction. It is taxed according to its own rules, and the taxes can't be changed by what you do with the money afterwards. (There is an exception if you are exchanging one business property for another, but that does not seem to be the case here.)
Assuming this is your second home, that was lived in by a family member without charging rent (or charging less than market rent), then you will have to pay the capital gains tax. Sorry. You can reduce your tax by documenting any adjustments to your basis, such as improvements and certain closing costs, as described in publication 523.
https://www.irs.gov/forms-pubs/about-publication-523
‎August 22, 2023
7:47 AM
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