Tax benefit from using house sale proceeds to buy new house can save on Capital Gains tax?

Forum|Forum|1 year ago
April 15, 2024
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I paid a huge amount of Capital Gains Tax last year from selling my primary residence property in November 2022, and then bought a new house (my new primary residence) in November 2023. I read this is a "1031 Exchange" (a tax break for when you use your proceeds of your house sale for another one in-like condition), but I didn't do this last year. Can I still get a tax break, such as partial reimbursement of the Capital Gains Tax paid? I applied ALL of the proceeds of my house sale (plus more) to this new house.

xmasbaby0

Employee

Since 1997, it has not been possible to avoid capital gain tax by using the proceeds of the sale of the old house to buy a new house.

SALE OF HOUSE

If your gain was more than $250,000 filing Single, or more than $500,000 filing Married Filing Jointly the sale must be reported on your tax return. Whether you re-invested the gain in to another house is irrelevant. If you have a Form 1099-S go to Federal>Wages and Income>Less Common Income>Sale of Home (gain or loss)

If you owned and lived in the home as your primary residence for at least 2 of the last 5 years on the date of the sale, you do not have to report the home sale if the gain is less than $250K filing Single, or less than $500K filing Married Filing Jointly (and you both owned and lived in the home for at least 2 years).

If you are using online TT, you need Premium software to report the 1099-S

NOTE: If you have ever used the home as rental property or claimed a home office, you have more information to enter

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**