Home Selling in Milwaukee>Question Details

Helmut, Home Owner in Milwaukee, WI

I soled my house. How long after I have to invest monies of sale into another property to avoid taxes on monies?

Asked by Helmut, Milwaukee, WI Mon Mar 21, 2011

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You have already blown the chance. Once you sell and take the proceeds you will owe cap gains on the property. To avoid that you need to do a 1031 tax exchange and follow all the rules, and the first rule is to not accept the proceeds of the sale. You must use a company or person to hold your proceeds in escrow for you while you follow the 1031 rules. You must identify a property within 45 days of the sale of your house and close on it within 180 days or you have to pay the cap gain.

If it was your primary res then you can avoid the cap gains tax if it was your primary res for 2 of the past 5 years. Seek advice from your tax adviser to find out how much you can avoid.
1 vote Thank Flag Link Mon Mar 21, 2011
Helmut - you must first tell us if this is your primary residence or was it a rental (investment property).

0 votes Thank Flag Link Mon Mar 21, 2011
You should ask your tax adviser these questions. Usually, on the sale of your primary residence, you will owe no capital gains tax on the first $250,000 gain for a single person, $500,000 for a couple. But, there are some restrictions, so ask your qualified adviser.
0 votes Thank Flag Link Mon Mar 21, 2011
It's my understanding that you have 2 years if it was your primary residence. You may want to check with a tax person for verification.
0 votes Thank Flag Link Mon Mar 21, 2011
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