Sold 1 investment house to buy another and 1031 exchange wasn't done

I sold a 2 family house to buy a 4 family house, but the attorney didn't apply for the 1031 exchange. If the 4 family house costs more then the 2 family and is purchased within the 6 month window, or same calendar year, will I have to pay capital gains tax. I owned the 2 family house for over 10 years prior to selling and I have a gain of 175K, which is being applied to the 4 family house.
Reply to
donnamw1234
If the transaction was not structured as a Sec. 1031 exchange the sale of the 2 family house would be fully taxable. What the proceeds were used for in a non-1031 exchange doesn't matter.
Reply to
adjunct
Exactly. But if you lived in the house you sold, for two years out of the last five, then the first $250,000 ($500,000 if you were married at the time) could be tax free.
Stu
Reply to
Stuart O. Bronstein
This was a two family home. At best, 1/2 could be eligible for the exclusion if the poster lived there, but the other half would not.
Reply to
adjunct
And then there are the "nonexcludible depreciation recovery" and "periods of nonqualified use" rules that might both apply to the gain on the principal residence part of the sale.
Reply to
lotax

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