How can Captial Gains affect the sell of a rental property?

[Tishanna Traylor]

There is a seller who wants to sell her house but is concerned about paying capital gains? Does anyone have any suggestions. Thank You

[Kyle Martinez]

@Tishanna Traylor As far as I know, Capital Gains are only paid if the residence was not lived in for 2 of the last 5 years or greater. If she has lived there for 2 or more years, there will be no CG tax on up to 250,000$ per individual, or up to 500,000$ per married couple. The residence also has to be the borrower's Primary Residence, not an investment property. Otherwise, there is an option called a 1031 Exchange, where the profits from the first property can all be allocated to a property of "similar" status and no gains tax will be collected as long as the second residence is purchased and closed on within a certain time period. I believe the time period is 180 days or 6 months. I'm fairly new to this, so maybe a more experienced professional can chime in.