Avoiding Capital Gains Tax for selling my home in under a year of buying
I bought my home 9 months ago but am about to sell it for a significant profit. I purchased it for $311,000 and selling for $496,000. Is there a way to avoid paying short term capital gains tax? If not is there a way to reduce the amount? I live in GA so subject to state and federal tax. Please let me know.
Answers:
Good question. It sounds like you already have a buyer and sales price in mind, so it sounds like a like-kind exchange isn’t an option for you.
You are right that a sale after only 9 months would force short-term capital gains tax on you. However, I you could hold the property for more than one year, you would get long-term capital gain tax treatment. Perhaps you could work out a deal with the buyer to rent it to him/her long enough to get you well over the one year holding period. Perhaps you could come to an agreement that would be beneficial for both of you.
Feel free to contact me if you wish to engage me to help. Even though I practice as a CPA in Texas, I have clients in other states.
Adam Dickreiter
Also, I would like to add that my reply assumes that you do not qualify to exclude the gain under Section 121 of the Internal Revenue Code, for the sale of your primary residence. Please take that into consideration.
Adam Dickreiter
