Hello everyone! As part of our goals to invest in real estate we decided to sell our primary residence (in California) to cash out about $100k. We just accepted an offer and escrow is to close mid January 2018. When escrow closes we would be living in that property for 2 years and 11 months. We were hoping to buy a couple of rental properties as well as pay off some liabilities with the profit from the sale, but with the new tax bill passed from our understanding we now have to live in the property for 5 years to not get taxed on it?
We contacted our tax guy and he said that the changes are not official, but we want to plan for worst case scenario. Is there any way to not get taxed if the everything on the new bill is implemented? What are ways we can invest our profits to avoid penalties/taxes?? We're hoping that something like the 1031 exchange would help? Is there such thing for selling primary residences without having to buy another primary residence?
We were super excited to take the first steps in our goals to financial freedom, but it would be so sad if almost half of what we're cashing in just go to taxes!
To all the tax experts, please advise!!!! Thank you in advance!
