real estate tax is real confusing

Trying to wade through all the tax verbiage (which is no better than legal verbiage) of IRS Publication 523. Lots of hoops and hurdles to reward and punish people’s transactions and behaviors.

I just need a simple answer to a simple question. A friend owns and lives in a house. He’s married, files jointly, and has lived there for 1 year. He’s considering a move to another state about a 1000 miles away.

Can he sell his old house and buy a new one, without getting penalized with gobs of capital gains tax? If so, how, and where does it say so in the IRS publication(s)?

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  1. yvonne says:

    ask Ken Tam – he might know w/ his experience @ IRS.

  2. yvonne says:

    I believe you can have up to 500K before paying capital gains. See under bullet 4 (excluding the gain, maximum exclusion)

  3. chris says:

    Hey DJ,

    I will try and get the correct answer for you by tomorrow. I pretty sure I know it, just don’t want to give you incorrect info. I’ll be in touch tomorrow.