Capital gains on home sale

[Ryan2019]

Scenario - in Jan 2018 I moved into a house I had to remodel/upgrade and finish a basement.  In September 2019 I will sell the home with profit probably around 20k if that. So I don’t meet the exemptions for capital gains relating to the 2 yr requirement or any special circumstances (too bad marriage wasn’t one) but am wondering if since I did not have gains on the house I sold in 2018 to move into my current home, could I avoid paying gains on my current.  The home prior I lived in for 6years and had no capital gains from that sale that were recorded or claimed.  In fact I probably lost a few thousand in that sale.  Thank you for any feedback. I will use a registered agent or tax attorney this year but want a ballpark on what I should guesstimate. 

[tagteam]

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@Ryan2019 wrote:

.....since I did not have gains on the house I sold in 2018 to move into my current home, could I avoid paying gains on my current.  The home prior I lived in for 6years and had no capital gains from that sale that were recorded or claimed....

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No, unfortunately you cannot deduct a loss on the sale of personal use property (such as a principal residence) and also cannot use that loss to offset, or somehow transfer the loss, to your current principal residence.

In sum, you cannot use the loss on your prior home and will have to pay income tax (at the applicable capital gains tax rate) on your current home.

[Ryan2019]

Thank you for your response.  I was looking and Was wondering if the look back exception applies since there was no gain on the previous sale.  

Im fine with paying taxes on a gain. It’s a good problem to have.   

[tagteam]

I am not sure what you are referring to, but you have to meet the look-back requirement to qualify for the exclusion, which means you can only take the exclusion once during a 2-year period.

See https://www.irs.gov/publications/p523#en_US_2018_publink10008998

[tagteam]

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@Ryan2019 wrote:

Im fine with paying taxes on a gain. It’s a good problem to have.   

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It definitely is a good problem. Regardless, don't forget to add all of the improvements you made to your cost basis and also that you can deduct all of your selling expenses from the selling price.

[Ryan2019]

I appreciate the help. It does make sense and yes forgot about all those closing cost etc. all of a sudden the 20k got a bunch smaller. I will definitely let an accountant or attorney work at my return this year. Thank you. 

Ryan