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millere201
Returning Member

Selling my home, less than 2 years, by 1 week

Hello,

 

I am selling a personal home that I purchased on November 8th of 2019, I will sell it on November 1st of 2021. I cannot change the closing date. The profit will be 30k, if I reinvest into another home, will I have to still pay capitol gains as it is within the same months to almost be 2 years? I am moving for work and it will be over 200 miles away

4 Replies
tagteam
Level 15

Selling my home, less than 2 years, by 1 week


@millere201 wrote:

....if I reinvest into another home, will I have to still pay capitol gains...


Reinvesting in another home will have absolutely no impact on any capital gains tax that may be due as a result of the sale of your current home. That rule was eliminated over 20 years ago and is no longer in effect.

 

However, you may qualify for a partial exclusion since your move was work-related.

 

See https://www.irs.gov/publications/p523#en_US_2020_publink100073097

 

 

 

You can calculate your partial exclusion by completing the worksheet at the IRS web site (link below).

 

https://www.irs.gov/publications/p523#en_US_2020_publink100073100

 

 

GeorgeDenseff
Level 8

Selling my home, less than 2 years, by 1 week

Because you are moving for work and it is more than 50 miles from your home, you qualify for partial exclusion.   

Here is a link to the IRS site with explanation and a worksheet to compute your exclusion.

 

Capital Gains Exclusion on Sale of Personal Residence

DoninGA
Level 15

Selling my home, less than 2 years, by 1 week

Reinvesting the gains from the sale of personal residence on a new personal residence to defer the gains on the sale was removed form the tax code in 1997.

 

Gain or Loss equals Sales Price minus Selling Costs minus Adjusted Basis of the home (Purchase price plus the cost of improvements prior to the sale)

 

You will have a partial exclusion since you are selling the home due to a work-related move and will not owe capital gains taxes on the gain.

See IRS Publication 523, Selling Your Home page 6 - https://www.irs.gov/pub/irs-pdf/p523.pdf#pqge=6

Use Worksheet 1 on page 7 to determine your exclusion.

millere201
Returning Member

Selling my home, less than 2 years, by 1 week

This is helpful, due to not profiting over 250K, due to exclusion being lowered 239K, and only making 30K, i am in the safe zone.  THANK YOU!

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