I'm selling my home and have only owned it for 14 months. How can I get around paying capital gain tax?

[herny12590]

I purchased my home for $197,000 ans I'm selling my home for $239,000.

[SweetieJean]

Did you live in  it all that time?

[herny12590]

Yes, I have lived in the home the entire 14 months.

[SweetieJean · Accepted solution]

The rule is that you have to have lived in the house 2 out of the last 5 years. Otherwise, any gain above what you paid will be added to your income.  Be sure to go back and look at anything you might have done that would have increased the basis in the house, since you bought it. Did you do any construction on the house, improvements?

If you are selling due to the following exceptions, you will be eligible to prorate the gain:

• because the location of your job changed,
• because of health reasons, or
• for some other unforeseen circumstance.

https://www.irs.gov/publications/p523/ar02.html#en_US_2015_publink10009003

[herny12590]

What about if I buy another house rather quickly?

[SweetieJean]

The provision to roll the money into another home went away many years ago.  However, depending upon your tax bracket, your Federal capital gains rate should be low. State may be different.

[herny12590]

I reside in Florida. My income and sale of home is average. I just need to know what the best route to take and not lose money I cant afford to lose.

[Critter]

There is no best route just the correct one ... follow the program interview to be guided and report the sale per the IRS regulations.

[Hal_Al]

The long term capital gains tax rate is 0% for those in the 15% or lower tax bracket and 15% for those in higher brackets

[herny12590]

@Critter#2 Of course, I understand that... I just wanted to know if there are any exclusions to the rule under 24 months that I was not aware of to reduce the stress.

[herny12590]

Also, the only reason for my move is because of work however, I'm still employed by the same employer. I moved approximately 65 miles away thinking the commute would not be an issue. I was wrong, not only am I violating policy for my company vehicle, I hate the drive!

[SweetieJean]

Relax!  You are making money on the sale, even with the capital gains tax.

[herny12590]

@SweetieJean lol I am trying here! But I need that money for my new home!

[Critter]

SweetieJean posted the rules above ... if you fall into any of those exceptions then you may use the partial exemption and the program will walk you thru those questions ... but in the end only you can decide if you qualify.   That is what I meant by completing the return correctly even if it isn't what you want.