4 ms·
I think that the income tax on your home's realized equity can screw this plan up. Normally when you sell one house and buy another, the equity gets rolled thr
by lallysingh 6y ago
I think that the income tax on your home's realized equity can screw this plan up. Normally when you sell one house and buy another, the equity gets rolled through untaxed through an exemption. I forget the specifics, maybe it's a 1031 exchange?
- steffan 6y agoA 1031 exchange is only relevant to depreciated investment property subject to capital gains at sale. By engaging in a 'like-kind exchange', the basis of the new property is adjusted and it avoids being taxed on the sale price vs. the depreciated value. There is a standard exclusion of $250K (filing single) for a property used as a personal residence. https://www.irs.gov/taxtopics/tc701 https://www.irs.gov/taxtopics/tc701