How Do I Lessen My Capital Gains?
I am selling my personal property after 8 months of living there. I will make around a $275000 profit. Is there any way I can lessen the amount of tax I will have to pay on the gains? Maybe other places I can put the gains to avoid so much tax. I am not doing a 1031 on it either.
If you sell your personal residence after only 8 months of ownership, then the sale triggers the tax. It does not matter what you do with the money after the sale, the tax will still be due.
You can lower the tax rate from your ordinary income tax rate to 15% by selling after you have more than one year of ownership under your belt.
If you have some compelling reason to sell other than a profit motive, you can qualify for a reduced maximum capital gains exclusion. Job transfer, financial hardship, and health issues that require a move all qualify for a reduced maximum capital gains exclusion.
Consult your tax advisor for specific details.