topic I sold my home last yr claiming capital gain exempt on 20k gain. Now I'm selling the house I'm in a little over a yr later. will the gain be on just this house or both? in Retirement tax questions

I sold my home last yr claiming capital gain exempt on 20k gain. Now I'm selling the house I'm in a little over a yr later. will the gain be on just this house or both?

kmm22 — Wed, 26 Jul 2023 18:39:39 GMT

I doubt I will have gain on my current home but I don't want to have to go back and pay taxes on the 20k I was exempted on because I didn't live in this one for 2 years.

Re: I sold my home last yr claiming capital gain exempt on 20k gain. Now I'm selling the house I'm in a little over a yr later. will the gain be on just this house or both?

SoCalGal21 — Wed, 26 Jul 2023 18:44:24 GMT

You can only claim the Home Sale Exclusion once every 2 years. Since you claimed it on the last home, it is not available for the sale of a 2nd home within a two year period. Some people elect to use a Like Kind Exchange to delay paying the tax or an Installment Sale. https://turbotax.intuit.com/tax-tips/home-ownership/tax-aspects-of-home-ownership-selling-a-home/L6tbMe3Dy

Re: I sold my home last yr claiming capital gain exempt on 20k gain. Now I'm selling the house I'm in a little over a yr later. will the gain be on just this house or both?

MelanieC1 — Wed, 26 Jul 2023 18:58:58 GMT

Hi @kmm22

You are only eligible to exclude the gain on your primary residence if you lived in the home for 24 months (does not have to be consecutive). It sounds from your question that you only owned the home for a year so you would not be eligible for the gain exclusion on the sale of this home.

As a result, you will pay taxes on any gain when you sell the home. You will not need to recapture any of the gain from the previous sale.

Be sure to keep good records of your selling expenses or any costs to prep the home for sale. When you prepare your tax return, have your Final Sales Agreement as certain selling expenses can reduce your gain. Same for your original purchase agreement when you were the buyer -- you can adjust your basis in the property by certain expenses you paid when you purchased the home.

We have tax experts that can help identify deductible expenses if you need help when preparing your return.

Thank you!

Re: I sold my home last yr claiming capital gain exempt on 20k gain. Now I'm selling the house I'm in a little over a yr later. will the gain be on just this house or both?

Mike9241 — Wed, 26 Jul 2023 19:09:25 GMT

@SoCalGal21 1031 can't be used for a personal residence.

Re: I sold my home last yr claiming capital gain exempt on 20k gain. Now I'm selling the house I'm in a little over a yr later. will the gain be on just this house or both?

SoCalGal21 — Wed, 26 Jul 2023 19:20:07 GMT

On the initial home sale, you can prorate the Credit even if you do not meet the full 2 year requirement.