Capital gains tax

[bvbeeskep]

I have lived at my primary residence for three years. In 2024 I sold 1/3 of an acre off of my 1 acre residence. I will sell my primary residence in 2025. Will I pay capital gains tax on the 2024 sale of the 1/3 acre, or can the sale be deferred until 2025 tax time?

[MaryK4]

Because you sold the land in 2024, you would normally report the sale on your 2024 tax return.  However, because it was part of your primary residence, you may be able to report the sale in 2024 with basis to show no gain on the sale in 2024 so it can be excluded when you sell the primary home in 2025 in order to qualify for the section 121 exclusion.