RE Capital Gain Tax?
I purchased a house almost 8 years ago. I lived there for 5 years. I let it to renters since 2 years & 10 months ago. I would like to sell it now. If I sell the house within next 2 months (before the end of 3 years on rental), should I have to pay capital gains on RE sale?
- SlumlordLv 71 month ago
You are supposed to have lived there 2 of the last 5 years when you sell, so you would have to sell the place within the next 60 days. However, if you moved out the renters, moved back into the place, then "changed your mind" and then sold it; I guess you would avoid the problem.
So, you would have to sell within the next 60 days, or move back in and then sell the place, or possibly fudge the rental dates a bit to meet the "2 of the last 5 years" living there requirement and thus to get the tax deduction.
- curtisports2Lv 71 month ago
If you CLOSE on the sale before you get to the 3 years, you qualify for the exemption from capital gains. If you signed a contract tomorrow, you might not close in time.
- Anonymous1 month ago
You must live in the house for two of the past five years to qualify for the 250k/500k if married capital gains exemption.
Remember, a sale is completed when the transaction closes, not when the offer is accepted.
If you've depreciated the home as a rental, you'll need to recapture that depreciation as taxable income.
- WilliamLv 71 month ago
No. I'm in my 3rd house and I've yet even qualified to pay a CD tax.
We're allowed like a $500k in profit before we pay CG on real estate. OK, I'm uncertain about the amount, but it's way up there.
Check the net for more info.