taxes on home sale

[littlefish]

We purchased a home during fellowship. Unexpectedly, we ended up moving post-fellowship out of state for a new job.

Since we only lived in the home for 1 year (due to a work related move), would we still be able to avoid capital gains on the slim profit that we'd be making?

[jfoxcpacfp]

The mortgage and loan payments are irrelevant. The tax law hasn't changed for your situation - if this was your main home for 2 of the last 5 years, you can exclude up to $250k per spouse of LTCG.

Your basis is $560k. After commissions and fixing up costs, it's very unlikely that you will have a profit, but if you do, you'll be fine as long as you lived there for 2 years.

btw, interest on HELOC's and HEL's will no longer be deductible under the new tax law, so it's an even better idea to sell.

iow, no, you are not being incredibly stupid. I think you're making a wise decision. Your decision to be a real estate investor should not be based simply upon convenience.

[littlefish]

and how about if we only lived there 1 year instead of 2 because of a work-related move? is it true that we can still exclude $125k per spouse of LTCG?

[jfoxcpacfp]

littlefish wrote:

and how about if we only lived there 1 year instead of 2 because of a work-related move? is it true that we can still exclude $125k per spouse of LTCG?

Click to expand...

Yes, as I understand it, you'll be able to exclude $125k/spouse as long as you had to move > 50 miles away for work and you used the home as your primary residence for 1 year out of the last 5.