We are selling our apt but now are having title problems with the house we are planning to buy – so the house could fall through, but we’re probably going to go through with apt sale anyway.

Question is: is there a time limit within which we have to invest capital gains into another primary residence? That is, if we don’t buy a house within 1 year, will be charged tax? Our accountant said this rule no longer exists, so we have no time limit – but I just wanted to double-check.

Also, is the maximum deduction of profit (before capital gains tax kicks in) $500K for a couple?


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  1. I recently sold my house (a primary residence) after my wife passed, that was earlier in the year transferred to a trust on the advice of a lawyer as my wife was gravely ill, to protect it against medi-cal costs for her long term care. Now, speaking with a cpa, I’ve discovered I no longer qualify for the 500k deduction, much less 250k (for just myself), since the house belonged to a trust. The cap gains were a little under 500K, and I thought I wouldn’t even have to report it on Sched D, much less pay anything.

    My question is, what is the level of risk if I go ahead and not report it, assuming I would still qualify for the 500K exclusion? Would it be better to just go ahead and pay for 250K cap gain (as single)? It was not in a trust for much more than a year, and my wife had passed the year before.

  2. I recently sold my house (a primary residence) after my wife passed, that was earlier in the year transferred to a trust on the advice of a lawyer as my wife was gravely ill, to protect it against medi-cal costs for her long term care. Now, speaking with a cpa, I’ve discovered I no longer qualify for the 500k deduction, much less 250k (for just myself), since the house belonged to a trust. The cap gains were a little under 500K, and I thought I wouldn’t even have to report it on Sched D, much less pay anything.

    My question is, what is the level of risk if I go ahead and not report it, assuming I would still qualify for the 500K exclusion? Would it be better to just go ahead and pay for 250K cap gain (as single)? It was not in a trust for much more than a year, and my wife had passed the year before.

  3. I’ll add a comment, even though the thread is done. Housesearcher, I was one of the people that knew right away when reading your post that you were considering the narrow house (near your friends) but there was now a title problem. I previously posted responses to your questions that you specifically thanked.

    And, I just wanted to tell you not to let the trolls get to you. There’s nothing wrong with seeing what people have to say and it’s clear you take the advice here with a grain of salt. I occasionally post questions, too, and you know what? Sometimes no one ever responds to a post, and sometimes I get lots of conflicting advice, and sometimes I get helpful advice.

    I think there’s one or maybe 2 trolls here who have nothing better to do than to pick on a stranger who is doing no harm. Someone actually criticized you for not posting “answers” to other people’s questions — give me a break! Of course there’s no reason to post if you don’t know the answer, and there’s nothing wrong with posting any questions you have. Maybe people will stop answering, but you have every right to ask questions. And I believe most of us here are nice people who aren’t so insecure we need to attack someone who has alot of questions.

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