Lake Property For Semi Retirement
I am contemplating the purchase of a lakefront residential property with the long term intent of building on it, for use in several years as primary semi retirement residence. Would seek a property with older, rentable housing unit on it, to help with interim carrying costs. We are currently living in a non lakefront primary residence in the same county. Assuming that in 5 years, rental unit was demolished, new home built and current primary residence sold, would capital gains on current primary residence be transferable to lakefront property, thus sheltered from taxation ? Any other thoughts on this strategy ? Many thanks for the good advice in this forum.
As long as you have owned AND occupied your primary residence at least two of the five years prior to the sale, capital gains up to $250K per paxpayer are tax free.
The rollover residence replacement rules (which I think you allude to) were repealed in 1997.