Have a Tax Question? Ask a Tax Expert
Reinvesting your gains outside a 1031 Exchange does not give you relief from tax on a sale.
1031 tax deferred exchanges allow real estate investors to defer capital gain taxes on the sale of a property held for productive use in trade or business or for investment. This has to be set up prior to selling and you personally cannot receive the proceeds.
If you sale your main home (owned and used as your main residence for 2 out of the 5 years prior to selling) you can exclude up to $250,000 (if single) or up to $500,000 (if married) of the gain.
Gain is difference in purchase price plus improvements and sell price less cost to sell.
Please advise if you need more information or rating in a positive way is acceptable.