OT: Capital Gains on Home Ownership

[saab2000]

The collective wisdom and knowledge here amazes me. I have a quick question for those with some knowledge of taxes and homes.

Disclaimer: I'm not asking about how to cheat the IRS or anything of the sort. This is more or less a Yes or No question.

I own a home and have owned it since July 2017. This home is my primary residence and is not a rental property. I am considering selling this home. My research shows me that I am likely to be subject to a capital gains tax if I own/occupy it for less than two of five years.

Here's the question: If I sell before July 2019 but roll into a new residence am I still subject to this capital gains tax? And if I sell after July 2019 am I off the hook? I'm not going to make a $250,000 capital gain on the house unless I discover oil in my back yard so let's just say I make $20,000 on the house. Is this $20K taxable before July 2019 but not after 2019?

I am not changing jobs or divorcing nor to I have a medical reason to change residences. So these IRS exceptions don't apply.

Not really asking for advice but I can't find anywhere that I can sell before July 2019 and avoid this capital gains tax under my current circumstances. Can any tax experts confirm this?

[tv_vt]

Here's the question: If I sell before July 2019 but roll into a new residence am I still subject to this capital gains tax? And if I sell after July 2019 am I off the hook? I'm not going to make a $250,000 capital gain on the house unless I discover oil in my back yard so let's just say I make $20,000 on the house. Is this $20K taxable before July 2019 but not after 2019?


Not a tax expert, and things may have changed in the recent tax overhaul, but as long as you buy same price or higher price house within 2 years, no capital gains. Assuming you are under 55, cuz there's a one time exemption if you are over that age, where it allows you to buy down, ie downsize into smaller, cheaper house with no capital gains.

Don't forget to deduct any improvements and certain expenses off your sale price if your next house is going to be similar in price. Those expenses can affect capital gains. Also, capital gains only applies if your house sells for more that what you paid for it, obviously.

[saab2000]

Not a tax expert, and things may have changed in the recent tax overhaul, but as long as you buy same price or higher price house within 2 years, no capital gains. Assuming you are under 55, cuz there's a one time exemption if you are over that age, where it allows you to buy down, ie downsize into smaller, cheaper house with no capital gains.

Don't forget to deduct any improvements and certain expenses off your sale price if your next house is going to be similar in price. Those expenses can affect capital gains. Also, capital gains only applies if your house sells for more that what you paid for it, obviously.

Thanks. This is helpful. The next place is likely to be more expensive than the current place and will be much closer to where I work. But I am not changing jobs so that exclusion won't apply.

Obviously, I know that I need to consult an actual tax accountant for an official answer - just trying to mine the collective knowledge of this forum, which is quite considerable.

[CDollarsign]

I made 50k on the house I sold earlier this year. I believe there is a window of time that you have to put those proceeds into the purchase of a new home and not pay any tax on it.

[zap]

I made 50k on the house I sold earlier this year. I believe there is a window of time that you have to put those proceeds into the purchase of a new home and not pay any tax on it.

If I recall correctly what our accountant told us, that was some time ago. For the last few years it was/is a straight up exclusion. 250K for singes and 500K for married. Don't forget to account for documented capital improvements, selling costs, etc.

[glepore]

Correct, there is no rollover requirement. Its an exclusion now. As stated.
If you're there less than 2 yrs its taxable, but at the cap gain rate, not you're income bracket, on the net gain (ie you get to exclude commissions etc, and capital improvements, but not ordinary maintenance).