Sold home < 2 years - what to do?

[wjbrockman]

What is the name of your state? Arizona

I have a dillema as I just bought my house 11 months ago and am forced to sell it as I'm transferring with my company for the second time within the last 13months. This makes me selling a primary residence/buying a new primary residence/and selling the new primary residence all within the course of 12 months.

From my transfer to this job last year, I sold my previous primary residence of 5years with less then $11k gain and deferred this gain on my 2004 taxes (obviously not planning to move again for > 2yrs). This house didn't sell until November/04 either (approximately 7 months ago).

With my job transfer again in (Aug/2005), we've already got a contract on our current house The gain on my current primary residence is going to be considerably more as I'm selling the house for more:
Bought (Aug/04): $187,900
Sale price: $275,000
Deductible Sales cost: ~$16,000
Date of final sale/closing (July 29/2005)

What can I do to minimize my cost of capital gains for this situation?

Doomed for capital gains.....

[tdavidl]

refer to this link (if it doesn't work, go to irs.gov & search for Pub. 523).

[url]http://www.irs.gov/pub/irs-pdf/p523.pdf[/url]

i believe you'll qualify for a reduced exclusion based on the facts that you've laid out (unforeseen circumstances\relocation of employment). doing some quick math based on your facts, your reduced exclusion of approx $90,000 should still the entire gain. you should be AOK.

read the section titled "excluding the gain" in the publication mentioned above.