Will I be taxed if I sold my home?

Question

Hello BP!

Just trying to better understand the tax side of a home sale. I lived in my 3 unit for a little over a year now and plan on selling. Will I be taxed on capital gain?

Tyler Gibson · Answer

Account Closed Yes I believe you would. You must live in a property for 2 out of the last 5 years in order to qualify for the capital gains exemption. You can try a 1031 exchange to avoid the capitol gains.

Natalie Kolodij · Answer

There are actually 2 reasons you'll be taxed.

One 2/3 of the property is a rental not your primary (and hopefully has been reported on your taxes as such)

So even if you occupied it for 2 of the last 5 years (the 121 primary residency exclusion) only 1/3 of the gain qualifies.

BUT you've only lived in it 1 year. The IRS has a list of exclusions that will allow for a partial exclusion if you're moving for work, military, ect- so I walk discuss those with your tax pro and see if you qualify for one.

But again- that's only going to make 1/3 tax free. The other 2 units you can roll into a 1031 exchange, or pay tax on.

Ashish Acharya · Answer

Did you sell any house and took section 121 in last two years?

Are you moving because of work or health? Or any unforeseen circumstances?

Need to know these.

If you are not moving because of work or health, yes your cap gain will be taxable.

If you did, and if your rented out other two units in your house, you probably shield partial capital gain.

Need more detail to help you.

Will I be taxed if I sold my home?

Will I be taxed if I sold my home?

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