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Buying or Selling a Home/sell of exchanged residence

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Expert: - 7/16/2008


Question
We did a 1031 exchange from a ranch to a residence in March of 2006.  We rented the residence for 2 years and moved in in april of 2008. How long do we have to hold it to get our $500,000 deduction?  If we sell before that time can we claim part of the deduction for the time we lived there?

Answer
You need to have owned the residence that you obtained through a 1031, Bob, at least five years and live in it for two years as your prime residence (the times mentioned may be concurrent) before you can become eligible for a $500,000 capital gains deduction, providing husband and wife file a joint return. Otherwise, if you did not obtain the property through an exchange you need only live in the property two years. To assure yourself, I suggest you talk with a tax expert (CPA, tax attorney, etc.) I do wish you well.

Dick Dennis      dixiedee13@aol.com

Buying or Selling a Home

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Dick Dennis

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With more than 41 years as a real estate broker, I can solve most any problem presented. If I can`t, I do my research. Problems with mortgages, trust deeds, foreclosures, odd ways of conveying titles. Most any good Realtor can answer questions satisfactorily, but I answer questions that most cannot. Also, ask about my hard-copy newsletter, The Landed Gentry. It can also be sent to you via PDF.

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Solving real estate problems for 37 years.

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National Association of Realtors

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Publishes The Landed Gentry, guest writer in Who's Who in Creative Real Estate, First Tuesday, Financial Freedom and many newspapers

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e-Pro Realtor, Certified Distressed Property Expert, Who's Who in Creative Real Estate

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