Real Estate people in here

[houstondallas]

I sold my first house in June and am building our next house now. It wont be ready until March. I got a 1099-S form in the mail today saying I received a large amount of money from the sale. We did get money back from equity but not the amount listed.

My main concern is will I have to pay taxes on this money we "received" even though its going to be put down into the next house? I heard there is a time frame where its not considered capital gains and can be reinvested but I cant find the time frame.

[YALE]

Did you already put money into the new house?

[houstondallas]

Did you already put money into the new house?

No. Its in savings while its being built and then used at closing

[YALE]

No. Its in savings while its being built and then used at closing

You might be able to claim it as escrow, but it would need to be in an escrow account.

[SVT Lurch]

In general, to qualify for the exclusion, you must meet both the ownership test and the use test. You are eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale. Generally, you are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.

http://www.irs.gov/taxtopics/tc701.html

[03mustangdude]

always thought you didn't pay taxes on gains if they were your main house and under 250k profit

[Roscoe]

always thought you didn't pay taxes on gains if they were your main house and under 250k profit

You have to live in the house at least 2 years

[houstondallas]

always thought you didn't pay taxes on gains if they were your main house and under 250k profit

I was just told that today. Makes sense if its correct.