How long do I have to reinvest money from a house sale so as not have to pay capital gains?

Asked on October 1, 2015 under Real Estate Law, New York


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

You usually can avoid capital gains by selling the property (your primary residence) after two years of ownership.  After that, there is no concern with the funds. Capital gains is the profit from the sale of the house in this situation. As long you owned the home for two years in the past five year period, you have included previous capital gains in the past two years before this sale and you have not maximized the cap of $250k (single) or $500k (married), you can keep the profit.
The issue becomes after the sale but no ownership for the minimum length of time. You will need to immediately reinvest the monies (think almost simultaeously) in a new home purchase for your residence or you will need to pay taes on the gain.

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