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?

Comments(4)

  • hibby769th February, 2004

    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.

  • pmatheson19th February, 2004

    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?

  • myfrogger9th February, 2004

    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

  • edmeyer9th February, 2004

    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.

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