Whats the best way to avoid taxes when selling house in ct and I would like to purchase another house in MA

Asked by Kokopelli, Connecticut Mon Jan 25, 2010

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Joseph Hasti…, Agent, Bayside, NY
Mon Jan 25, 2010
HI Kokopelli. As stated correctly below, always consult your Accountant. Here's something to consider. The IRS allows an (IRC 121) "exclusion of gain from sale of principal residence." I believe this would pertain to you.

I believe it is the exclusion of taxes for a single person on up to $250K of profit from the sale of your principal residence and double that amount for married couples. Any remainder would most likely, be taxable but the purchase of another pricipal residence should mitigate most taxes to a large degree. Again, consult your accountant or a tax professional as I am not one.

Investment property is another story and I believe the (IRC 1031) 1031 exchange for like kind property is your best course of action. There are specific time-frames for finding another property and closing to be aware of and yes, a qualified intermediary (not just an Attorney) is the best professional to talk to. Check this site for 1031 info: http://www.legal1031.com

Don't go FSBO, consult a local Real Estate professional. I'm also happy to give you a referral. Good luck with the sale of your property.

Joseph C. Hastings
Prudential Douglas Elliman Real Estate
0 votes
Natale Terra…, , Newington, CT
Mon Jan 25, 2010
This is a loaded question that will have different answers based on your situation.
Is this your primary home?
Is a portion of your home business use?
Did you claim your exemtion on a sale of a primary home in the past 5 years?
If not you could exlude 250K up to 500K of gain on your home dependent upon your filing status.

The link below goes into detail and scenarios that might answer your question.

As always please consult your tax advisor for your situation.
0 votes
Don Tepper, Agent, Burke, VA
Mon Jan 25, 2010
Check with a tax professional.

If you're selling your primary home and buying another, that's not very difficult. Just make sure you do it correctly.

If you're selling an investment property with the intent of buying another investment property, look into a 1031 exchange--a so-called Starker Exchange. That's more complex, and you must absolutely be sure you're doing it correctly. You need what's called a "qualified intermediary," and must conform to various rules and regulations. Do NOT try to do it on your own. You can't.

Again, check with a tax professional before doing anything.

Hope that helps.
0 votes
Amanda Albert, Agent, Woodbridge, CT
Mon Jan 25, 2010
You will have to pay conveyance taxes to the town and state. If you are thinking capitol gains, as long as you reinvest the profits from this house into the new house, you should not have to pay taxes on that gain. AS ALWAYS....check with your accounant on any tax questions.

Hope this helps....Amanda
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