Solved: Can I minimize or avoid capital gains tax?
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Can I minimize or avoid capital gains tax?

 I purchased #1 home in 1999 for $125,000 in MA., refinanced it to buy current home in 2011 in NM (where I'm now living),  for $105,000.  rented #1 home for 6+ years. sold home #1 in 2018 for $170,000. while living in #1 home from 1999 to 2011, I added a garage, porch, solar hot water, windows, etc., $50,000+ in additions, etc.    after fees, I netted approx. $40K, how or can I claim the additions to avoid or minimize capital gains tax? 

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Level 6

Can I minimize or avoid capital gains tax?

You can add the cost of improvements you made to #1 home to the cost basis of that home when you report the sale.

You can also claim sales expenses such as brokers' fees, closing costs paid by you, cost of advertising for the sale. The sales expenses will reduce your capital gains. 

However, you must recapture depreciation allowable on that home during the years you rented the home.

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Highlighted
Level 6

Can I minimize or avoid capital gains tax?

You can add the cost of improvements you made to #1 home to the cost basis of that home when you report the sale.

You can also claim sales expenses such as brokers' fees, closing costs paid by you, cost of advertising for the sale. The sales expenses will reduce your capital gains. 

However, you must recapture depreciation allowable on that home during the years you rented the home.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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