Sale of personl residence (under 2 years) - Posted by Jason

Posted by Jk on October 19, 2003 at 13:17:31:

You can only do a 1031 for like kind investment property. In other words, a personal residence could not be exchanged. Just pay the 15% capital gains and consult your tax attornety next time.

Sale of personl residence (under 2 years) - Posted by Jason

Posted by Jason on October 17, 2003 at 12:22:11:

I recently sold my personal residence after having lived there for only 22 months. There were no extreme circumstances necessitating the move. Do I have to pay capital gains on the entire gain of $10,750? Any suggestions to make up for my idiotic blunder?


Are you a real estate investor? - Posted by michaela-ATL

Posted by michaela-ATL on October 22, 2003 at 13:44:11:

and do you live in a big city? Maybe it would be possible to take the prorated examption, if you had to move 50 miles away (the other side of town?) to do another rehab (change of job location)?

On the other hand, 15% of 10k is pretty small, so don’t sweat it and pay.


Re: Sale of personl residence (under 2 years) - Posted by E.Eka

Posted by E.Eka on October 18, 2003 at 20:49:31:

Well, let me put it to you this way…NO.

You had 2 choices before you sold.

  1. You could have waited 2 more months and paid NO capital gains up to $250,000 for singles and $500,000 for married couples on their primary residence.

  2. Did a 1031 like kind exchange. In order for that to happen, you’d have to set up the exchange with a 3rd party intermediary so that you don’t handle the cash. You then would have (I think 180 days) to invest the proceeds into another investment property or home.

You did neither and it’s too late for the 1031, so you’ll have to pay Cap-gains tax…but it’s not that bad because depending on your tax rate, you’d be looking at 15% or so. Look on the bright side, this was a small lesson learned. It’s only $11K. What if it was a flip and you were looking at gains of $40K or so?