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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3378
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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I own a home that is my principle residence in N.C. I want

Customer Question

I own a home that is my principle residence in N.C. I want to purchase another home and then place my current home on the market. Will I be able to use the cost of the new home I am buying to defer the capital gains tax from the sale of the one I am living in if I pay cash for the home i am buying?
Cindy Scollin
Submitted: 1 year ago.
Category: Tax
Expert:  Barbara replied 1 year ago.

Hi, Cindy.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you today.

Unfortunately, you cannot defer capital gains from the sale of a principal residence by purchasing another principal residence.

However, what is available to you is the sale of home exclusion which allows an exclusion of up to $250,000 (if you file single) or $500,000 (if you file married filing jointly) of the capital gains on the sale of your principal residence. The only criteria to claim this exclusion is that you must have owned and lived in the residence for 2 of the last 5 years immediately preceding the sale.

Please let me know if you require further information or clarification.

Thank you and best regards,

Barb

Expert:  Barbara replied 1 year ago.

I see that you are now offline. If you have any other questions or concerns, please come back to me here at your convenience, and I will be happy to assist you. If not, please take a moment to rate my answer because that is the only way I receive credit for answering you and alerts Just Answer to compensate me.

Best regards,

Barb