Updated over 6 years ago on . Most recent reply
Real estate taxes/capital gains
Good day BP from Clarksville, TN!
Apologies for the lengthy intro. We’re about to close on the sale of a house we bought as our primary home 10 years ago. Since I’m active duty military we rented it for almost 7 years upon receiving permanent change of station orders (qualified extended duty). That said, over these 10 years we accumulated $72,K in equity. As we know, capital gains are nasty. So, during my research I came across 1031 exchange here at BP! The only issue we’re having is nothing decent is aligning with the amount of $ or time to meet the “like-in-kind” requirement before we’re supposed to complete it. Upon more research, I found IRS publication 523. According to this pub, as long as we live the house for over 2 years and been the owners for 5 years before the closing date, we should be qualify for the exclusion of gains during the sale. I would have to show that I was ordered to moved by the government (qualified extended duty). The part I don’t quite have to clear is the fact that we bought another house here in TN and have been leaving in it as our “primary home.” So, would this disqualify us for the house exclusion gain?
Any info offered would be greatly appreciated, thanks in advance BP!
Regards, Ivan