I moved out of my primary home back in mid July 2017. I had rented that house for the last 2.5 years and ready to sell it now to take benefit of the tax break. As per tax laws, I need to close the sale by mid July 2020 to get the $500k(between my spouse and me) benefit. I have two questions :
1. How does IRS calculate the exact dates of the moving out? I am trying to find out what is my cut off to close the sale of the house.
2. Does COVID pandemic allow me an extension to sell the home later in the year and still enjoy the tax benefit? Considering the market conditions I will either have to sell the house at a lower price or might not even get a buyer. Any advice on how to manage around these conditions is appreciated.
I moved out of my primary home back in mid July 2017. I had rented that house for the last 2.5 years and ready to sell it now to take benefit of the tax break. As per tax laws, I need to close the sale by mid July 2020 to get the $500k(between my spouse and me) benefit. I have two questions :
1. How does IRS calculate the exact dates of the moving out? I am trying to find out what is my cut off to close the sale of the house.
2. Does COVID pandemic allow me an extension to sell the home later in the year and still enjoy the tax benefit? Considering the market conditions I will either have to sell the house at a lower price or might not even get a buyer. Any advice on how to manage around these conditions is appreciated.
Thank you.
Priya
1031 exchange deadline seems to be July 15th of 2020 as far as when you have to identify. Soon July 15th won't matter for when the subject property is closed. As for your other question, talk to a really good banker and they will help you out. Also, if you go the 1031 route, well before it closes talk to a qualified intermediary (qi) and don't use some flake. Bank may have a good recommendation.
I moved out of my primary home back in mid July 2017. I had rented that house for the last 2.5 years and ready to sell it now to take benefit of the tax break. As per tax laws, I need to close the sale by mid July 2020 to get the $500k(between my spouse and me) benefit. I have two questions :
1. How does IRS calculate the exact dates of the moving out? I am trying to find out what is my cut off to close the sale of the house.
2. Does COVID pandemic allow me an extension to sell the home later in the year and still enjoy the tax benefit? Considering the market conditions I will either have to sell the house at a lower price or might not even get a buyer. Any advice on how to manage around these conditions is appreciated.
Thank you.
Priya
1031 exchange deadline seems to be July 15th of 2020 as far as when you have to identify. Soon July 15th won't matter for when the subject property is closed. As for your other question, talk to a really good banker and they will help you out. Also, if you go the 1031 route, well before it closes talk to a qualified intermediary (qi) and don't use some flake. Bank may have a good recommendation.
@Priya Daftary the IRS doesn't calculate it. The closing attorney will ask you to sign a document affirming that this was your primary residence. They send it to the IRS, and when you file your taxes next year, you will also select the correct answer on the forms you file. That's it. Nobody will come look in the window to see where you are sleeping. Relax.