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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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If you own a home and its your primary residence, after two years you are free and clear of the tax (you know this).  If it's before two years, you could do what is called a "1031 exchange" and avoid taxes altogether. Yep, you heard me right. There are some rules around the 1031 exchange, your real estate agent should be able to advise you on this. It's quite common. You can read more about it here: https://www.investopedia.com/financial-edge/0110/10-things-to-know-about-1031-exchanges.aspx

Hope this helps! 

-Jordan Jones, RFC

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