Capital Gains

[Cumberland]

Does anyone have any knowledge on capital gains taxes in real estate? We are considering selling our house after living here 15months and moving to a fixer upper that has incredible resale potential. Our house was also a fixer upper and we think we can put it on the market for significantly more than we paid for it. I know a little about a 1031 exchange-but is that only for investment property rather than a primary residence. Is there any way we can avoid paying them?

From what I've heard, yes, you'd have to if you live there less than two years.

But, it depends on why you move...change of job, emergency, you can pro-rate it, like 18 mo is 3/4 of what you would pay.

And for after you've lived there two years , you only pay on profit over $250K each, $500K for a couple.

I agree with Tracy.

There are sometimes ways you can get exempt -- I think you have to move over X distance from the previous house for job transfer reasons or for health reasons.

I've only heard of doing a 1031 exchange on the investment or business property too. It's worth checking into, I think. Now that I think of it, a few of the houses we looked at when moving mentioned 1031 exchange as a possibility but I guess that could have been for rentals.

[DCJenn]

We're exempt because of the military- if we move because he's sent somewhere, it doesn't matter whether we've lived there for 2 years or more. Not that this info will help you but it might help other military med spouses!

Jenn