tax question on selling my primary home

[Cris Mullen]

Selling my primary home after a year and a half of ownership. Bought for 300K, selling for 340K. Quick research tells me I'm going to be paying 20% on the 40K profit. Is there any way to avoid this? I am planning on buying another primary home for 200K. I'm getting divorced if the tax code cares about that.

Thanks!

[Steve Vaughan]

Originally posted by @Cris Mullen:

Selling my primary home after a year and a half of ownership. Bought for 300K, selling for 340K. Quick research tells me I'm going to be paying 20% on the 40K profit. Is there any way to avoid this? I am planning on buying another primary home for 200K. I'm getting divorced if the tax code cares about that.

Thanks!

By the time commissions and closing costs get done with you, there probably won't be much gain to worry about. The one that always gets me is depreciation recapture and you won't have that. 

I've read you can take a prorated exclusion of the 2 year hold minimum, but doubt it will help much.

And no, you can't 1031 your primary res as @Alex Uman suggests. 1031s  are for investments only.