Hi everyone,
I bought my house as primary resident in 2015 for 320K. In 2022 we are building new house and will move in in end of the year. I have enough money to make down payment on new house and qualify for new loan without selling my current primary house. I plan to sell my current primary house after I close and move in my new house. So my question is if I sell my current house for 500K after move in into new house few month later, am I still qualify for primary resident tax exempt from capital gain (150K gain) ? And what happen if I wait for over 6 months or a year to start selling it (empty house not list for rent)?
Second Question: if I rent out my current primary house as investment house, 2 year later can I still exempt for capital gain due to I have lived there more than 5 years before I turn it to be rental property? Thank you so much
Source Taxpayer Relief Act of 1997:
- You can sell your primary residence and be exempt from capital gains taxes on the first $250,000 if you are single and $500,000 if married filing jointly.1
- This exemption is only allowable once every two years.1
- You can add your cost basis and costs of any improvements that you made to the home to the $250,000 if single or $500,000 if married filing jointly.2
