The capital gains ?..Bought the house I live in for 20,000(forclosure) fixed it up.Selling it for 55,000

Asked by Gail Soares, 01535 Thu Jul 9, 2009

65,000(houses are not expensive in my area)and the home is small 2 br. Want to buy a house for 99,000. Lived in my home for 1 1/2 years. Can I sell this one and buy the other one without paying capital gains tax? Because I would'nt be gaining anything since the house is 99,000 compared to what I am selling my home for 55,000 to 65,000. I had sold a home in Ma. to buy the forclosure.I had lived in the Ma. home for 12 years. And did not pay CP gains.

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Richard Yost, Agent, Auburn, ME
Wed Oct 23, 2013
You should consult a tax accountant or lawyer. Ask about a 1031 exchange or the 2 year exclusion
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Margaret Mit…, Agent, York, ME
Thu Jul 9, 2009
Hi Gail - Thank you for the additional detail. The answers that you have already received on your prior question on this still apply. Unfortunately, real estate agents cannot give tax advice. The advice to consult with a tax accountant is good advice. In this case, where you have owned your home for less than two years, it is particularly important to get professional advice on the tax implications. I think you are thinking of old tax rules re: buying a more expensive home, which may not be relevant here.
So you have two choices: You can read the IRS publication on the matter (link was given in your earlier question) and interpret it or you can pay for an hour of a tax accountant's time. I would get professional advice here. That means a tax professional. You will find this cheaper in the long run.
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