We are currently staying in a rented place and have been renting our primary house for over 6 years. We want to sell our primary house now. I heard we will taxed on the gains as it’s more than 5 years? Is there any other option? I read a bit about 1031 exchange , has anyone gone through this? #mortgage #housing
What’s the fraud ?
No fraud here. You must stay in your primary residence for at least one year before renting it out. You will have to inform your lender before renting though. In terms of capital gain, When selling a primary residence property, capital gains from the sale can be deducted from the seller’s owed taxes if the seller has lived in the property themselves for at least 2 of the previous 5 years leading up to the sale. There is a limit on deduction though. https://www.josephthomas.us/two-out-of-five-years-rule/
correct you will pay full tax on gain. do the math it might be worth moving back for 2 years
Hire a good real estate agent with experience on 1031 exchange. They will take care of it. I have gone through it. You have to be proactive to give. A replacement property within the time limit.
1031 is just kicking the tax can down the road. And if you want to avoid paying tax then you need to keep doing 1031 till you die and then the final property gets passed to your survivors tax free.
no longer true in cali after prop 19 right? don’t know about fed rate, i think that depends on meeting the 10m exclusion imo the problem with 1031 is you still have a rental property. sounds like op wants out of that
1031can be stressful, but not impossible. There's a bunch of strategies around it as well to make it a little easier. The biggest things you need to know are 1031 exchange and 121 exclusion.
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