"JS" <jsandison[at]earthlink.net> wrote:

- quote -

What you do with the proceeds is not relevant. You must own
and reside in the sold home for two of the last five years
to exclude $500k of gain.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

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"JS" <jsandison[at]earthlink.net> wrote:

- quote -

You will have to pay capital gains (and recaptured
depreciation allowable or allowed) on the sale of your
condo/rental. What you do with the money is irrelevant and
does not change the taxation.

Sale of your current residence could be tax-free, as long as
the gains are under $500,000 and you have owned and lived
there for two of the five years before sale. It sounds like
you qualify. There is no requirement to buy another home --
ever -- with the proceeds.

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"JS" <jsandison[at]earthlink.net> writes:

- quote -

The only way to avoid current capital gains on the condo
would be to do a section 1031 exchange for another rental
property (or move back into the condo for 2 years before
selling it.)

Phil Marti
Topeka, KS

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In August of 1999, we purchased our home and began to rent
our Condo. Now in August of 2003, we would like to sell the
condo and use the proceeds to purchase a new home. Once
that transaction is complete we would then sell our current
home and use the proceeds to purchase a vacation home.

Do we need to pay capital gains tax from the proceeds on the
condo, if we use all of it towards the purchase of a new
home?

Thanks in advance for your help.

John S

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