Can I avoid taxes on the sale of my house by buying a new home?
June 23, 2004
Subject: Short Term Capital Gain on Sale of Home
Date: Wed, 19 May 2004
Hello Mr. Gray,
I sold my half of a house that I had for a little over one year because the relationship ended. I heard that if you buy another home within a certain amount of time, you do not have to pay short term capital gains. Is this true? And if so, how much time do I have to buy another property?
Date: 28 May 2004
No. Someone may be thinking about rules that were repealed in 1997.
However, you may qualify for an exception allowing part of the exclusion for gain from the sale of a principal residence due to an unforeseen change in circumstances. See Treasury Regulations Sections 1.121-3 and 1.121-3T or IRS Publication 523, page 15.
We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.
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