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  1. #1

    Default Home Sales Capital Gains on Taxes

    My question involves real estate located in the State of: California
    Hello folks this past Dec 2018, in Los Angeles CA, we found a great deal on a home and we bought it. Then the very second week of January 2019 we sold our main home and used that money for the one we bought. I was told that we can save 28% or so on capital gain.

    Can someone please advise me what we need to do so we donít have to pay it? We were also told that we only have 6 months, from the time the home was sold, to capitalized on this opportunity but don't know if that is true.

    Thanks so much!

    Susie

  2. #2
    Join Date
    Sep 2010
    Posts
    19,257

    Default Re: Home Sales Capital Gains on Taxes

    There is no rollover on personal residences. What you do with the money from the sale is immaterial. There's no six month rule. Someone is confusing the 1031 exchange for investment properties I think.

    If you lived in the home as your primary residence for 24 out of the 60 months before it was sold, you can exclude up to $250,000 ($500,000 for couples) of the gain (provided you didn't have any non-qualifying use such as rental).

  3. #3
    Join Date
    Mar 2013
    Posts
    17,231

    Default Re: Home Sales Capital Gains on Taxes

    That six months business isn't true. You get the exemption on your 2019 tax return so you have to wait until you file your taxes in 2020 for 2019. If you are married you can exclude up to $500,000 of your gain ($250,000 if single).

    IRS Publication 523 explains everything.

    https://www.irs.gov/pub/irs-pdf/p523.pdf

    When the 2019 booklet comes out at the end of the year you'll be prepared.

  4. #4
    Join Date
    Oct 2014
    Posts
    7,432

    Default Re: Home Sales Capital Gains on Taxes

    Quote Quoting adjusterjack
    View Post
    If you are married you can exclude up to $500,000 of your gain ($250,000 if single).
    You may exclude up to $500,000 of gain if you file a joint income tax return with your spouse for the year in which the sale takes place.

  5. #5

    Default Re: Home Sales Capital Gains on Taxes

    To everybody who responded THANKS so much!! This is great to know.

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