EXCHANGE RULES

[koko2351]

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....

[M-MTax]

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