I'm going to be buying a new house. If I can't sell the house I have now before I buy the new one, will there be a capital gain when I eventually do sell the current house? And if so, to avoid that, could the new house be titled in someone else's name until I sell the current house, then quit claim the new house to me?
The law you seem to be remembering was changed more than eleven years ago.
You no longer have to buy a replacement house.
If you owned and lived in this house as your main home for at least two of the five years before sale, you can exclude the first $250,000 of gain. If filing jointly, your spouse may be able to do the same.
If this does not meet your circumstances, please write back with more informaion.
snipped-for-privacy@ymail.com posted;
Not to worry. You will have three years from the date you move out of your current home, during which the sale will be free of any "capital gains tax" up to the limit of $250,000 ($500,000 if MFJ).
This tax break is offered to anyone who has lived in a residence as their "main home" for 2 of the last 5 years. So long as you meet that standard, it doesn't matter when you buy the new house -- or if you buy another house at all. The first $250,000 (or $500,000 if MFJ) will be free of taxes. Better yet, you don't even have to mention the sale on your return. Just keep your own records handy, in the event there's ever an inquiry. (Some firms which handle closings have been known to issue 1099s for the amount of the sale -- and this _may_ trigger an automatic letter "inquiry" from IRS. If this ever happens, all you would have to do is write a reply explaining the "income report" was a result of the sale of your main home in which you had lived for at least 2 years, and within the 5 years preceding the sale. That'll satisfy the IRS -- but it's nice to have written records, including utility receipts, RE tax receipts, etc.)
Bill
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