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Sale of personal house

Customer Question
If you flip a house...
If you flip a house you bought (lived in it less than 2 years) at a gain, can you defer the gain by purchasing a new residence.
Submitted: 8 years ago.Category: Tax
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Answered in 11 minutes by:
4/2/2009
Tax Professional: Lev, Tax Advisor replied 8 years ago
Lev
Lev, Tax Advisor
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If that is your personal property and you have a gain on the sale - that will be capital gain and you owned the property more than a year - long term capital gain taxed at reduced rate - not more than 15%.

You may not deter the gain on your personal property - to defer the gain using section 1031 exchange transaction - that should be your business or investment property.

Sorry - that transaction will likely be taxable.

 

Even you lived less than 2 years if the main reason is moving to a new job location, health issues or some other unforeseen circumstances. Please verify the reason you are moving. See more details in the IRS publication 523 - http://www.irs.gov/pub/irs-pdf/p523.pdf

 

 

 

Lev
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Customer reply replied 8 years ago
This is even if you use the proceeds to purchase a personal residence
Tax Professional: Lev, Tax Advisor replied 8 years ago

Hi Mark,

yes - that is correct - it doesn't matter how you are using proceeds.

If you are not qualified for exclusion - the capital gain on the personal property is taxable.

Sorry - if you expected a different answer.

 

 

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