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Can You Sell A House You Just Bought?

Sitting in your living room, you get the call. Deployment. Relocation. Job transfer. With excitement, you begin thinking about where you are going to live next, what you want in the next house, and then it hits you….we JUST MOVED IN 6 MONTHS AGO. How much will we have to pay in taxes? Can I sell my house within a year of purchase?

Selling your house within 1 year or less of purchase happens quite often. If you have owned the home for less than 12 months, it is considered a “short term capital gain,” and subject to ordinary income tax rates.

What About Selling a Home Purchased Over 1 Year Ago?

If you have lived in the house for longer than 12 months, then it would be considered long term. With long term capital gains, the IRS typically allows you to exclude up to $250,000 of capital gains on real estate if you’re single, or $500,000 if you are married and filing jointly. In order to exclude these gains, you MUST meet the following criteria:

  • Lived in the house 2 of the last 5 years as a primary residence
  • Occupation of the house does not have to be consecutive, as there are exclusions to the residency rule*
  • You must not have claimed this exemption in the last two years

* Active-duty service members are not subject to the residency rule. They can waive the rule for up to 10 years if they’re on “qualified official extended duty.” This means the government ordered you to reside in government housing for at least 90 days or for a period of time without a specific ending date. You’ll also qualify if you’re posted at a duty station that’s 50 miles or more from your home. source: irs.gov

Take the stress out of your sell. Consult your CPA to discuss the best route to minimize your tax obligations and contact Summit All Cash today at (719) 394-3573 for a no-obligation property assessment. We will give you a same day cash offer, so you can focus on the next chapter in your life!

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