Sale of Property - Rollover to New Build

[STW1011]

Greetings,

In August 2022, my husband and I sold a rental property (residential) and we are building a new home.  The new home is projected completion March 2023.  Can we roll over all or some of the proceeds from the sale of the rental property to our new home without being tax?  Also, we will sale our home where we currently reside.  Can we roll the proceeds to the new home as well? 

This is our first sale of residential property and want to know how to minimize the tax amount.  Your expertise is greatly appreciated.

Happy Wednesday!

BWoods

[rferreira 1]

To defer taxes on the gain in the sale of the residential rental property,  you would have needed to do a Section 1031 Exchange BEFORE the sale was finalized.  You missed this opportunity.  As far as the sale of your personal residence, the first $500,000.00 of profit is exempt from tax.  If you made more profit than that, you can roll it over into a new personal residence and not pay any tax on that providing the house was your primary residence for two of the last five years.  

[Mike9241]

@STW1011 

@ rferreira 1 

you can not use 1031 to defer gain on the sale of rental real estate by buying a personal residence.   there is no longer the ability to defer the taxes on the non-excludable gain from the sale of your old residence by buying/building a new house.  that went out of the code in 1997. the only way to avoid the taxes on this gain is to have capital losses in the same year or as a capital loss carryforward from a previous year.