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Level 1

Question

EXCHANGE RULES

1 reply
24 views

Hello,

Relinquished and exchanged into an investment property in Sept 2017. Rented it for two years. Moved in after two years. living in it for two years.

Can I sell it after 5 years of ownership and have a tax free profit up to 500K & and add back depreciation from purchase of relinquished property? It is free and clear now. Can I create an investment property again while taking cash out, move out and purchase a primary residence with that cash? If I can take cash out, are there limits of the cash out?

Thank you for your help.

LG

Hope that's clear....

Level 15

After 5 years you can do that but it's still subject to allocation. Read the guidance in this revenue procedure........... https://www.irs.gov/irb/2005-07_IRB#RP-2005-14