How can I avoid paying capital gains tax on sale of our primary home?

We mortgaged our home in Colorado to purchase a home in Florida this year. The Florida home is now being used as a rental to offset our costs. When we sell our Colorado home and move to Florida, that home will become our primary residence. How can I avoid paying or reduce payment of capital gains tax to Colorado and the federal government?

Real Estate, Taxes
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August 2016
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You should always consult a tax professional who is familiar with your personal circumstances. However, unless you have something different with your circumstances not listed here, it appears you can eliminate or at least lower your capital gains tax depending on the amount of the gain. Having a mortgage does not affect this.

The IRS offers a capital gain exclusion upon the sale of your primary residence up to $250,000 if you are single and $500,000 if you are married. You are eligible for this exclusion if you have owned and used the home as your primary residence for two out of the last five years. You can view more information here https://www.irs.gov/taxtopics/tc701.html

August 2016
August 2016