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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?

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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?

  • We have lived here 49 years. – oldtimer43 May 3 '15 at 18:23
  • 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. – oldtimer43 May 3 '15 at 18:25
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    The need to roll over gains into a new residence ended with tax law changes in the 1990's. – mhoran_psprep May 3 '15 at 18:35
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    As mhoran noted, the law changed 25 years ago. "Someone" should stop offering bad advice. – JTP - Apologise to Monica May 3 '15 at 18:39

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