Legal Question in Tax Law in California

Capital Gain

I am an U.S. citizen and have worked overseas for several years. I want to know how I can avoid paying capital gain (once in life time) when I am going to sell my U.S. house, which was a rental property a year ago but is currently vacant.


Asked on 5/05/06, 6:46 am

2 Answers from Attorneys
Donald Field Donald L. Field, Jr., Attorney at Law

Re: Capital Gain

re sale of home see:

http://www.irs.gov/publications/p523/index.html

re 1031 exchange see:

http://www.taxrights.com/likekindexchanges.htm

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Answered on 5/08/06, 6:20 pm
Ken Koenen Koenen & Tokunaga, P.C.

Re: Capital Gain

There is no "Once in Lifetime" exclusion from Capital Gains. If you lived in the property for 2 of the past 5 years, you can take a $250K exemption if single, or a $500K exemption if married and filing a joint return. Since it has been a rental property, you can sell and purchase another investment property, and DEFER the tax until a later time. You must follow specific rules to do this, so if you plan to go this route, you will need professional advice.

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Answered on 5/05/06, 12:18 pm


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