I need to find out if I sell my house if I will get taxed on it or if I have to invested it right away.

Forum|Forum|7 years ago
June 6, 2019
3 replies
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VolvoGirl

Level 15

Doesn't matter what you do with the proceeds anymore. The old rule about rolling over the gains expired back in May 1997.

The new rule is.........Starting in May 1997…..For a primary home, if you owned and lived in your house for 2 out of the last 5 years when you sell you can exclude the gain up to $250,000 for single or 500,000 for married from tax. You can not take a loss on your tax return.

To exclude gain under the rules in this publication, you in most cases must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale.

rjs

Level 15

What you do with the money from selling your house has nothing to do with whether you pay tax on the profit. Investing the money in another house or in anything else will not eliminate the tax. (There used to be such a rule, but it was eliminated in 1997, 20 years ago.

null725

Level 13

Form 2119 was discontinued by the Taxpayer Relief Act of 1997. Since that time, you can not defer capital gains on a home by buying one of equal or greater value. What you can do, if you owned and lived in the home for 2 of the 5 years ending on the sale date, is to not have to pay tax on a gain of up to $250,000 (Single), or $500,000 (Married Filing Jointly). Note that if you ever used the home as a rental, then the exclusion does not apply to any gain equal to the depreciation that you claimed or could have claimed.

For further info, see IRS Pubs, 530, 523, and 17

http://www.irs.gov/pub/irs-pdf/p530.pdf

http://www.irs.gov/pub/irs-pdf/p523.pdf

http://www.irs.gov/pub/irs-pdf/p17.pdf