ecspot[at]gmail.com wrote:

- quote -

The option to defer some or all of the gain into a
replacement residence went away in 1997. Under current tax
law, what you do with the gain is irrelevant.

To qualify to exclude up to $500,000 of the gain on sale of
your principal residence, you have to both OWN and OCCUPY
the house as your principal residence for two of the five
years prior to sale. You do not meet this qualification, nor
any of the exceptions that would allow a partial exclusion
limit.

Bottom line: You will owe capital gains tax on the entire
gain, at a maximum of 15% for long-term (over 1 year)
holding period.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

I have a question about how this would work. We bought our
condo last november. Since that time it has gone up over
$100k. We made the decision that we want to move to another
state for cost of living reasons and to be close to my
family. We plan on buying another house out there for about
10k less than what we originally bought our condo for (about
$130k less than what the sale price of our condo would be
now). We would move next May, 6 months sort of the 2 year
mark. We would keep the condo at least until that 2 year
mark due to pre payment penalities, but we would have to
change it to our secondary residence as the new house has a
primary residence requirement to purchase. In other words I
have to claim my new home as primary residence to be able to
buy it (rules of the builder/loan company). Since we will
still be keeping our condo until the 2 year mark but only
lived in it for 1.5 years, how does the capital gain tax
effect me?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >