Capital Gains Tax and IRA

[James Harris]

Hello..

Last year I sold a property and did not find another property to roll the earnings into within the time period. I was told that I could roll the earnings over into an IRA to avoid paying the capital gains tax. Does anyone have any insight into this? Thank you in advance for your reply.

[Ashish Acharya]

@James Harris , 

In 2018, if your earning is from the flipped property, then you probably can shelter 5500 (plus 1000 if older than 50 years old) via IRA. However, If you are also a participant of your employer-provided retirement plan, then there is an AGI limitation beyond which you cannot deduct the contribution to IRA. (Single 103K, Married 101K). However, you cannot roll the entire profit into IRA. The rollover people are referring is something different and does not mean the contribution.

If your property was rental, you cannot use that gain to contribute to IRA as it is not earned income per IRA requirement.

You can contribute the same amount even without flipping the property with just W-2 Income. Contribution to IRA is available to everyone if you have just W-2 income.