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Updated over 3 years ago,

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2
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1
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Nicholas O'Kelly
  • 28278
1
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2
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Capital Gains exclusion or 1031 exchange?

Nicholas O'Kelly
  • 28278
Posted

I'm in the military and bought a house in TN in January 2019 (2.5 years ago). In August of 2019, I received orders to move, so I only ended up living in the house for about 9 months. We rented the house out and will not be moving back to that location, so we will not ever live in residence for the 2 years required to be exempt from capital gains. We are now selling the house, and I want to reinvest over half of the gains into another rental property (or two). I make about $75K/year and will probably end up with around $70K after closing costs on the house.

My question is two parts, do I need to do a 1031, or is there another tax exclusion since I would never meet the residence exemption due to the military moving me? 

If I do need a 1031 exchange, can I do that for only part of the gains?


Thanks all.

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