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Author Topic: Capital Gains Question  (Read 2476 times)

Offline G&C

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Capital Gains Question
« on: March 07, 2006, 08:41:07 am »
Hello Everyone,

I have a quick question I hope someone can help with.

This is a Texas question.

I currently live in home A. It will be two years in June.
I have found another residence (home B) that I would like to buy and move into.
However, I currently have not finished all the fix up work on home A.

Question is, if I buy home B, move into it, finigh home A and put on market, do I have to pay capital gains? Technically it has been my primary residence for two years. There must be a transition period for moving into a new home and selling old home.

Any one have any imput?

Thanks,
Gary S.

Offline kdhastedt

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Re:Capital Gains Question
« Reply #1 on: March 07, 2006, 09:13:39 am »
For Federal Taxes:   To qualify for the capital gains exclusion, you have to have lived in the property for twof the last five years.  So, basically, if you have lived in it for 2 years then move out, you have 3 years to finish it and sell it and still get the exclusion.  The exclusion is $250K for single and $500K for married.

Someone from Texas will have to chime in as to state tax...

Keith
« Last Edit: March 07, 2006, 09:15:08 am by kdhastedt »
I have CDO...it's like OCD but in alphabetical order - the way it should be!

Offline G&C

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Re:Capital Gains Question
« Reply #2 on: March 07, 2006, 03:36:34 pm »
Thanks for the reply.

As far as I know there is no state tax in Texas.

If I have 3 years to fix it up, that would be great.

I am curious if it would hurt me to move a month early or does that really matter.

How would IRS know exact date I moved if I still own property?

I am not sure how it works.

I appreciate the help.

 




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