Question

If you own a house for a year and you are goingTo sell to buy your parents house that is more expensive do you have to pay capital gains tax if the equity going new

Forum|Forum|2 years ago
October 11, 2023
1 reply
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TurboTax Deluxe Online

@mjlowell1 reinvesting the profit has no bearing on the tax implications - that rule changed back in 1997.

If you sell your home within 2 years of purchasing it and you are doing so for your own convenience, any profit is subject to capital gains tax.

M

mjlowell1Author

So it’s a yes that he will have to pay it even though it’s going into another home. This is all confusing to me

rjs

Employee

Yes, that's right. He will have to pay tax on the gain. It doesn't matter what he uses the money for. Using it to buy another home doesn't make any difference.

You can eliminate some of the confusion if you just forget about the rule that was removed from the tax law 26 years ago, and concentrate on what the current rules are.