Avoiding Capitol gains

2 Replies

Can you/I sell a house before two years and not pay any Capitol gains?

I heard that if you re invest all the money's from a sell back into real estate, if you sell before two years that you are not subject to Capitol gains tax.

Is this true? I thought that you had to wait two years to sell to avoid Capitol gains?

Now obviously I'm talking about a primary residence and not a second home or rental, I'm also aware that there are some exceptions to that two year rule but I'm not talking about those.

I'm talking about buying a house, living in it for say ten months or even one year and then selling and buying another house to live in and not pay Capitol gains. 

Is there truth to this today? Or it's this something that used to be true in the past? 

Thank you all for any input.

Originally posted by @Adam Matlock :

Can you/I sell a house before two years and not pay any Capitol gains?

I heard that if you re invest all the money's from a sell back into real estate, if you sell before two years that you are not subject to Capitol gains tax.

Is this true? I thought that you had to wait two years to sell to avoid Capitol gains?

Now obviously I'm talking about a primary residence and not a second home or rental, I'm also aware that there are some exceptions to that two year rule but I'm not talking about those.

I'm talking about buying a house, living in it for say ten months or even one year and then selling and buying another house to live in and not pay Capitol gains. 

Is there truth to this today? Or it's this something that used to be true in the past? 

Thank you all for any input.

 Yes depending on the level of the appreciation you can avoid the gain even if you move out before 2 years. 

But the move has to be because of the health, work, and such. 

Unforeseen circumstances counts too such as multiple births, loud neighborhoods  and such. 

You can’t just move before 2 years ana avoid gain. 

@Adam Matlock

I have never heard of "Capitol gains."  At least I've never seen any gains from Washington.  : )

Sec 121 is surprisingly taxpayer friendly on what constitutes unforeseen circumstances regarding failure to meet the 2/5 rule.

"I'm talking about buying a house, living in it for say ten months or even one year and then selling and buying another house to live in and not pay Capitol gains."

Generally it would be hard to qualify for unforeseen circumstances in this situation.  Quite the opposite, you're actively planning to live there less than 2 years before you even purchase the property.  Generally it's best to just wait 2 years...

"I heard that if you re invest all the money's from a sell back into real estate, if you sell before two years that you are not subject to Capitol gains tax."

You're describing a 1031 exchange.  You cannot 1031 a principal residence.  Has to be business property.