capital gains on sale - Posted by rbt

Real Estate Investing Real Estate Financing
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Posted by Veronica IL on January 14, 2005 at 11:16:39:

Well I am new here and definitely not a pro, but according to my studies, if you lived in the old condo for any 2 out of the last 5 yrs, I BELIEVE that you are exempt from capital gains taxes. Also, if you reinvest any gains from any sale into another property, that defers your taxes on the property you just sold. Anything beyond that is out of my realm of knowledge.

Veronica

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capital gains on sale - Posted by rbt

Posted by rbt on January 14, 2005 at 09:31:33:

I have a condo that is 100% paid for. I plan to buy another one and live in it as my primary residence. Here’s the question: If I sell the old place after I’ve already purchased the new one, do I have to pay capital gains if I place the proceeds from the sale onto the new loan’s priciple? And, what if I rent the old place for 6 months to a year before selling it? Would I then have to pay capital gains? I’m trying to sell the old place and get a new one w/o doing anything wrong from a tax perspective.

Thanks guys!

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Re: capital gains on sale - Posted by Dave

Posted by Dave on January 16, 2005 at 24:39:08:

Veronica is correct, you are exempt from Capitol Gains tax if you have lived in the condo for 2 of the past 5 years. The exemption is 250K if your single and 500K if your married.

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Re: capital gains on sale - Posted by Natalie Smith

Posted by Natalie Smith on January 15, 2005 at 07:17:43:

What Veronica said below is correct if you lived in it the last 2 out of 5 years, your gain is tax free. Check with a CPA to make sure you meet all of the criteria.

The second part of what Veronica said only applies to investment property, so it shouldn’t apply to you unless you convert the condo to a rental. It is referred to as a 1031 exhange and it defers tax as opposed to avoiding it.

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Re: capital gains on sale - Posted by dreams

Posted by dreams on January 14, 2005 at 14:47:35:

Why not just Refi the old condo, roll the money into the new one and then hold the old condo as a long term investment. Let a renter pay the paments on the mortgage.