1031 Question Regarding Moving for a Job

General Real Estate Investing
1

Can anyone help with this question?

  • I bought a home in CA back in March 2002, and lived in it for a year.
  • I then moved to CO in March 2003, and rented the home out ever since.
  • Since I moved due to a job change, would I be able to sell it tax-free or should I do a 1031?

Thanks for the help.

2

if you sell the house before March 2006, gains up to $250k (or $500k if married) will be tax-free. No need for 1031 exchange

3

aak5454 is correct that you may still qualify for a capital gains exclusion on the sale of your former primary residence.

However, he failed to take into account that you only occupied the property for one year, so a reduced maximum exclusion of $125K/$250K would apply.

4

Dave T is right on the money. The relocation due to your job was more than 50 miles, so you would qualify for a reduced exclusion 1 year divided by 2 year holding requirement.