Tax Articles
Introducing Our Firm
Our Services
Real Estate Taxletter
Need Help?
Other Websites
Site Map

Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Connect on Google+

Can I defer gain on my home sale by buying a more expensive home?

February 28, 2006

Subject:  Selling my Condo
From:  Johan
Date:  Thu, 26 Jan 2006

I bought my condo for $90,000 and am selling it for $99,000. The problem is we want to close the sale on February 17, 2006 and bought the house on February 27, 2004. We would fail the two-year test. We are buying another home for $290,000, and the closing for the purchase is also scheduled for February 17, 2006.

Will we have to pay a capital gains tax, even though we are buying another property? Both are primary residences.


Date:  Mon, 06 Feb 2006

Hello Johan,

The old rule of deferring a gain by buying a more expensive residence was repealed in 1997.

Unless you can change the closing date or come up with a good "unforeseen circumstance" for a partial exclusion, the gain will be taxable.

Good luck!
Mike Gray

We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this website was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.

Can I defer gain on my home sale by buying a more expensive home?

Home | Real Estate Taxletter | Articles | FAQ | Introducing Michael Gray, CPA | Need Help? | Other Links

Michael Gray, CPA
2190 Stokes St., Suite 102
San Jose, California 95128-4512
(408) 918-3162
Fax (408) 998-2766
email: mgray@taxtrimmers.com
© 2016
Subscribe to
Michael Gray, CPA's
Real Estate Tax Letter