Quote:
Originally Posted by Lisa22
Can anyone give me a quick and dirty refresher? Here is my circumstance: Bought a CV in December 2020. Rented it for two years, then became a FT Florida resident and have lived in TV since 2023. Filed Federal and State taxes for 2022 in another state.
If we sell and buy another property here, I understand that there is no Florida Capital Gains tax but the Federal Capital Gains tax still applies. However, in Florida the rules are that one must own the property AND be a Florida resident for at least two years to avoid any Capital Gains? I do know to take the sale of the property and add any expenses due to updating the property in order to calculate the left over equity for which I will have to pay taxes. Capital Gains are also dependent upon income level as well.
Am I correct or can someone correct me on any of the above? Thank you in advance.
We do not have a Trust set up in Florida yet - should we do that first? We would like to sell/buy in the very near future.
-Lisa
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First - no FL tax - though it you lived in another state in the year you sold the property the gain may be taxable there.
The federal exemption for a gain applies if you live in a primary residence in two of the past five years prior to the sale. You said you moved here in 2023 so the exemption doesn't apply yet.
If you had a loss on the property in the years you rented it and could not take the loss because of passive activity rules you would be able to take the accumulated loss in the year of sale.
If you were selling this as a commercial property and buying another commercial property to defer the gain you could use Section 1031.
Gain on the sale is based on the cost of the property (including certain costs) less depreciation taken against the net sales price (after expenses).
I'm a CPA - if you want to give me a call my number is 561-968-8571.