selling primary residence to buy another one - tax implication (sale, real estate)

[rsnsmh]

We are planning to sell our current primary residence in forsyth county (~$320K) and buy another house - similar price range also in forsyth county. Current house was purchased 2 years ago with $316K; what are the tax implication of this financial transaction?

[cwkimbro]

Well if your home increased in value and you get more for it you would have to report it as a capital gains if you made a considerable amount.

However, at your price point and in such a short period of time, you will be covered under an exclusion and likely won't be taxed or have to report it. So you shouldn't have to worry about that too much. The only caveat is to stop people who are low-level real estate investors, you can only take the exclusion every so often and you must live in the home for a year as a primary residence. I think you must wait 2 years before being able to take the exclusion again.


Most of your expenses will be for real estate and bank related expenses of buying and selling a home. If you move too frequently, you will take a big hit.

You'll want to talk about it with your tax guy or real estate agent to make sure there is no odd thing to would cause a problem, but in all likliness... you're ok

[luma124]

After paying for a realtor, closing costs for selling the house and any improvements (i.e. new floors, paint, new a/c etc. but not repairs like fixing the roof) you made during the 2 years you lived there you very likely won't have any gain to report. Also, if you lived there for exactly 2 years or more if you are married you can make up to 500k in gains in a sale and pay no capital gains tax and if you're single it's 250k in gains.