EXCHANGE RULES

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.

Hope that's clear....

560

Level 12

Aug 5, 2021 10:36:01 PM

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

Why sign in to the Community?

EXCHANGE RULES