I am buying a house and will be selling some mutual fund shares for the down payment money. If the deal falls through, can I rebuy the same shares to avoid paying capital gains tax now? I.e. return it as if I had never sold the shares?

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    That isn't an option, no. Do you have a specific concern about something falling through? Normally, if your intention is to buy a house, you'd just move on to the next house if the first deal doesn't go through, in which case presumably you'd need the same money for a down payment anyway. If you are concerned about your ability to get a loan, you can get prequalified before you sell your funds. – Justin Cave Nov 13 '20 at 16:34
  • We're not in a hurry to buy a house. We offered on this house because it is across the street from where we've been renting. If the deal falls through, we may not find a house we like for a while so we would be paying capital gains tax and losing potential stock market gains for nothing. We are already preapproved, so the contingencies are on the inspections and appraisal. – Sirius 5 Nov 13 '20 at 16:38
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    Do you have a plan on when you want to sell the shares, relative to buying the house? If not, you can talk to the mortgage lender about when you absolutely must have the money in liquid form. It's usually before your final underwriting review, but that can be quite close to purchase time. – Upper_Case Nov 13 '20 at 16:48
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    Would you want to buy a house within the next, say, 3 years? If so, probably better to hold low risk cash or similar, instead of risky mutual funds. You don't want a market drop to happen the month before you need to put down a deposit. – Grade 'Eh' Bacon Nov 13 '20 at 17:40

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