Posted by Ronald * Starr(in No CA) on January 12, 2003 at 17:06:59:
Darlene------------
In general, yes you will have to wait two years.
However, the IRS just issued some preliminary rules, I believe, laying out what rules would be required to allow a person to take a prorated exemption for selling in less than 2 years. However, unless you are in a very high appreciation area or you buy siginficantly below market value, you probably will not have much gain anyway, so why worry about it? If you use a real estate broker to sell the second property it is likely that you will have a loss, not a gain anyway.
In general, it is a very bad idea to buy a house intending to resell in one year. The “transaction costs”–mainly closing costs–for real estate are just too big when you buy and sell. You will usually be better off renting. Or, if you can arrange things to suit you, you might be better remaining where you are and selling your property when you plan to move later. Or rent out your current property, rent someplace else, and then sell your home in a year, when you are wanting to move.
There may be some discussion of this topin on the real estate financing forum of CREONLINE.COM or you could post a question there and get a more authoritative answer.
Good InvestingRon Starr******