Occupied Property For 1year 6 Month And 1 Day, No Capital Gains?
I understand that if one buys and sells a property inside of 2 years they must pay capital gains on the profit. I was told by a real estate friend that anything over 1 year and 6 months was considered to be 2 years to the IRS. Is this true?
No, not right. The IRS considers two years to be 730 days, and not a day less
[addsig]
Anything less then a year goes towards your annual income... then taxed at that rate
Anything sold from 1 year and 1 day to 729 days is taxed at 15%
Anything sold over 2 years hold time, is no capital gains (This is for primary residence only!) You must reside within the dwelling for 2 of the past 5 years to claim no capital gains. For instance:
You may build a house, live in it for any 2 years (does not have to be consecutive either) and rent it out for 3 years and still pay no capital gains...same will be said for existing primary homes turned rentals.
GL,
MT
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Agent/Investor
[ Edited by MikeT1013 on Date 03/02/2005 ][ Edited by MikeT1013 on Date 03/02/2005 ]