Quote:
Originally Posted by Amohernyikes
Question on selling FSBO and Capital Gains. Looking for clarification on if we would sell our home (and we have been here a year), would we still have to pay capital gains on the profit if under 250K, but we have not been in the house for 2 years. Can anyone explain capital gains a tad more on selling a house on our own and have a profit of less than $250K. I thought if you reinvested the monies into a new home prior to a year, you would be okay and not have to pay the taxes. But doing a little research that doesn't seem to be true.
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The reinvestment rule has been gone for more than 20 years. The newer rule is that you must use the house as your primary residence for at least two of the past five years to avoid capital gains taxes. So, if you have been in the house for more than a year, but less than 2 years, you will owe capital gains taxes.