Capital gains tax question (US)?
I currently own a condo which is for sale. I have lived there for the past two years. I have been offered a package with my job which will allow me to get an apartment rent free in another state for an extended period of time. Is there a restriction on the amount of time that I must purchase a new place after my current place sells? I would like to avoid paying capital gains on the condo.
The rule about purchasing a new house (or condo) went out years ago. Now if you live in the residence you sell for at least two of the five years right before the sale, and own it for two of those same 5 years, you can exclude up to $250K of gain from being taxed, $500K on a joint return.
Unless you are active duty military, you don’t meet the "lived in your primary home two out of the last five years you owned the house" rule in order to meet the exclusion requirements. If you are active duty military you might want to go to http://www.irs.gov and read up on Publication 523. Either way, Pub 523 is good to have in this situation.
References :
I am a tax preparer.
The rule about purchasing a new house (or condo) went out years ago. Now if you live in the residence you sell for at least two of the five years right before the sale, and own it for two of those same 5 years, you can exclude up to $250K of gain from being taxed, $500K on a joint return.
References :
There is no restriction on the time to purchase another home, or any requirement that another home be purchased. You can exclude up to $250K of capital gain on the sale of your principal residence ($500K if married).
You need to have owned and lived in the home for 2 of the 5 years preceding the sale to have the capital gains excluded.
References :
Agree with Judy and Ninas on the answer to your question. As long as the condo was your primary residence for the past two years, you qualify to exclude up to $250K ($500K if joint) on the sale of your condo and you do not have a time frame to reinvest that gain in real estate.
References :