Help To Avoid Capital Gains?
My husband and I have been living in this home for 10 months. We want to buy a bigger home 5 houses down the street. Capital gains would cost us about $60,000. We would like to rent out our current house or can sell it if needed. Any advise?
If you live in a home for 2 of 5 years you can claim it as a primary residence and sell it with no capital gains.
Although it's not legal or ethical, some people will move and keep the utilities in their name until they've hit 2 years and then sell it as a primary residence.
The best way would be to do a 1031 Exchange. Sell the property and use the proceeds to buy your next property.
You said you wanted to keep your first home. Without living in it for 2 years, I know of no way to do it legally.
Live in your house 14 months more, before moving into the house down the street thast you buy now and rent for 14 months. If you have $60K in gain now, think, what will you have in 14 months?
Why are you selling? You may be able to prorate the gain exclusion. Read my article as a primer:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=415
Your personal residence does not qualify for a 1031 tax deferred exchange. I don't see why you can't rent out your residence. You could even put a Home Equity Line Of Credit (HELOC) or a second or refi to get cash for down payment on the house down the block.