Our current primary residence (in MD) is under contract to a property developer, and we expect to go to closing in about 24 months. If we build a new primary residence on property that we own in another state (PA) before closing on the current residence, will we still qualify for the $500,000 exemption from capital gains?
1 Answer
The exemption has nothing to do with buying. Only selling after owning a house for 2+ years. The rules have exceptions, but this is the general idea for gain exemption. How long have you been in your current house?
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Someone told me that we would only qualify for the exemption if we put that money into a new primary residence. That didn't sound right to me, so I wanted some professional info. May 3, 2015 at 18:25
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1The need to roll over gains into a new residence ended with tax law changes in the 1990's. May 3, 2015 at 18:35
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1As mhoran noted, the law changed 25 years ago. "Someone" should stop offering bad advice. May 3, 2015 at 18:39