Posted by Ed Copp (OH) on July 14, 2003 at 20:56:53:
So what? If you owe it you need to pay it, or you can move back in for a year or so until the two year requirement has been met.
How will they find out you have been renting the house out? Duh, once again. Do you file tax returns? If so that is one way they might just find out. If you do not file tax returns, then forget all of the above.
Hi I have a house that I lived in for a year before renting it. I want to sell it one of these days, but know I must have lived in it for 2 years to avoid capital gains tax.
How can I avoid paying this tax? How can “they” find out that I have been renting the house for the past year?
Also, I’m not sure what the percentage of the sale proceeds is? is it something like 5%?
An option you have available is the 1031 tax deferred exchange. You will need to reinvest the $$ though. Do a search of the archives on 1031.
Good Luck,
Mike