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HOW TO AVOID CAP GAINS ON PRIMARY RESIDENCE
Hi All!
I recently (November 2020) purchased a property in Northern California and the market lifted quite a bit in the 12 months (18%+). Sadly i am having to move cities due to another job opportunity but didn't want to just sell or 1031 as i feel as though the market can go up.
the rule for exclusion is 2 years of 5 but if i only lived there 1 year and rented it out the second year before selling (and rented another property in the new city) to maintain this one as my primary. Can this be considered an exclusion after i sell it next november to avoid cap gains?
Hope that made sense!
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- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
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@Nisarg Gandhi, Job related reasons like a transfer should qualify you to take a proration of the maximum gain. If you lived there a year you should be able to take the first $125K ($20K if married) of profit tax free. Your accountant will verify that status.
- Dave Foster
