Want to sell my house but do I need to wait?

[Query1234]

What is the name of your state? CA

My husband and I purchased our townhouse March 2003. We are thinking about selling our house and looking for a house closer to our jobs in an adjacent city. Do we have to wait until we've lived at our current home 2 years before we can sell without capital gains taxes or is there a way to do it now if the money we get goes towards purchase of another primary residence? Someone mentioned a 1031 exchange to me but from what I have read, that only applies to business/commerical properties and does not apply to personal use real estate like my house. Any advice would be appreciated.

Thanks.

 

[Snipes5]

You are correct, 1031 does not apply to personal residence.

If you are living in your house now, and working at your job, and you move to be closer to the SAME job, the IRS will probably not allow a reduced exclusion. They usually allow it if you are selling your house to move more than 50 miles away to work at a different job.

In your position, I would tough it out and live there until March 2005, that way you can sell it and get the full Capital Gains benefit, ie no tax on gain, up to $500,000 for a married couple.

It doesn't matter whether or not you buy another primary residence, you will still pay tax on all of it if you sell too soon.

It's only another 7 months, vs selling now and the whole thing is taxable.

Snipes

 

[Query1234]

Thanks

Thanks for the information. I guess we were getting a little ahead our ourselves. Better break the news to the hubby.