My wife and I have two pieces of land as investment property which we are looking to sell. One of the lots we expect will sell for a gain while the other we may break even on. We are also looking to lease our existing home and buy a new home. The question that I have is there any vehicle that we can use to defer the gain from the lots. We anticipate using all the proceeds from the sale of the lots for the new home. What can we do ?
I assume you own the lots in your own name, and not in some tax deferred entity such as your IRA. If this is so, then under your scenario, there is no tax deferral vehicle available to you.
If, instead of using investment property sale proceeds to purchase your primary residence, you use them to purchase more investment property, then a 1031 tax deferred exchange could help you.