Capital gains tax question

[Joe Shepherd]

Hello,

I bought my house in April of 21 for 185k. It is now worth 250k in just a few short months. The house down the street from mine is the exact layout and just as nice as mine sold for 250k yesterday. Is there a way I could avoid capital gains tax if I decided to sell my house? I see that I might only owe 12% in taxes as I was a college student last year and didn’t make enough money to be in a higher tax bracket. Can some please advise? I feel like I need to take advantage of this market but am extremely nervous about the decision. What are the pros and cons of potentially selling my house? Any advice/responses would be appreciated!

Thank you!

[Ryan Best]

Joe,

For a second I almost thought I wrote your post!  Except for the college part, I'm in exactly the same position. I bought my home for $207k a few months ago (9 actually) and it is worth $375k now. Would like to sell it and avoid short term capital gains. From what I understand, the tax rate goes down after owning (living in) your home after the first 12 months (so maybe consider holding on until April 2022?) Alternatively, if you can, don't sell your home for 24 months and then you won't own any capital gains.  I'm sure others can give you more information about 1031 exchanges, etc., but I've bought a dozen homes holding them and selling every two years ... never had to pay any capital gains or taxes.

Good luck!