Capital Gains Question

Financing, Hard Money Lenders, Private Money
1

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.

2

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

3

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.