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What are the consequences of selling our house before we have owned it for two years?

We are contemplating selling our third home in four years. We moved and sold the two previous homes due to relocation for work. We are trying to understand the consequences of selling the house early. We will have owned the house for two years in August. If we sold the house in May (75 days before the two-year mark) will we still have to pay taxes if we put proceeds into a new home right away? What is the tax rate we would have to pay?

Real Estate, Taxes
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2 weeks ago

I was able to find the following on the IRS website:

Work-Related Move

You meet the requirements for a partial exclusion if any of the following events occurred during your time of ownership and residence in the home.

  • You took or were transferred to a new job in a work location at least 50 miles farther from the home than your old work location. For example, your old work location was 15 miles from the home and your new work location is 65 miles from the home.

  • You had no previous work location and you began a new job at least 50 miles from the home.

  • Either of the above is true of your spouse, a co-owner of the home, or anyone else for whom the home was his or her residence.

Other than that, you would have to pay taxes on it. Here are the long-term capital gains rates based on income and filing status.

Long-Term Capital Gains Tax Rate

Single Filers (taxable income)

Married Filing Jointly

Heads of Household

Married Filing Separately

0%

$0-$39,375

$0-$78,750

$0-$52,750

$0-$39,375

15%

$39,376-$434,550

$78,751-$488,850

$0-$461,700

$39,376-$244,425

20%

Over $434,550

Over $488,850

Over $461,700

Over $244,425

I hope this helps! Good luck!

P.S. Here's the link to that IRS website.

5 days ago