# House Sales, Taxes and Buying

**URL:** <https://boards.straightdope.com/t/house-sales-taxes-and-buying/282007>\
**Category:** Factual Questions\
**Created:** [December 28, 2004, 9:53pm UTC](https://boards.straightdope.com/t/house-sales-taxes-and-buying/282007 "2004-12-28T21:53:30Z")\
**Posts on this page:** 5\
**Page:** 1

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**Author:** ![congodwarf](https://avatars.discourse-cdn.com/v4/letter/c/e36b37/32.png) [@congodwarf](https://boards.straightdope.com/u/congodwarf)\
**Post date:** [December 28, 2004, 9:53pm UTC](https://boards.straightdope.com/t/house-sales-taxes-and-buying/282007/1 "2004-12-28T21:53:30Z")

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Someone once told me that if a person sold their first house and turned the profit over into another house within one year, they wouldn’t have to pay taxes on the profit.

Now, I don’t even know if this is true so that’s my first question.

Assuming this is true:  
Is the deadline actually 1 year?  
Does the WHOLE profit or just a percentage have to be used in the new purchase?  
Does a residential land purchase count or does the land actually have to have a house on it?

Thanks!

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**Author:** ![Bill\_Door](https://avatars.discourse-cdn.com/v4/letter/b/50afbb/32.png) [@Bill\_Door](https://boards.straightdope.com/u/Bill_Door)\
**Post date:** [December 28, 2004, 11:20pm UTC](https://boards.straightdope.com/t/house-sales-taxes-and-buying/282007/2 "2004-12-28T23:20:51Z")

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The current tax law is that you can sell your principal residence once every two years and exclude up to $250,000 of profit, or $500,000 of profit for a married couple without investing any of the money in anything. [Check this Motley Fool link for details.](http://www.fool.com/taxes/2000/taxes000428.htm)

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**Author:** ![beltbuckle](https://avatars.discourse-cdn.com/v4/letter/b/3da27b/32.png) [@beltbuckle](https://boards.straightdope.com/u/beltbuckle)\
**Post date:** [December 28, 2004, 11:26pm UTC](https://boards.straightdope.com/t/house-sales-taxes-and-buying/282007/3 "2004-12-28T23:26:43Z")

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I think that you may be thinking of a [1031 Exhange](http://homebuying.about.com/od/1031exchange/) , which is a tax-deferred exhange.

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**Author:** ![brownk](https://avatars.discourse-cdn.com/v4/letter/b/5f8ce5/32.png) [@brownk](https://boards.straightdope.com/u/brownk)\
**Post date:** [December 29, 2004, 12:27am UTC](https://boards.straightdope.com/t/house-sales-taxes-and-buying/282007/4 "2004-12-29T00:27:16Z")

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Actually, I think he’s thinking of what the tax law was prior to the current version, which Bill Door describes. Not sure if the rollover into a new residence had to be within one year or two years though.

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**Author:** ![congodwarf](https://avatars.discourse-cdn.com/v4/letter/c/e36b37/32.png) [@congodwarf](https://boards.straightdope.com/u/congodwarf)\
**Post date:** [December 29, 2004, 4:11am UTC](https://boards.straightdope.com/t/house-sales-taxes-and-buying/282007/5 "2004-12-29T04:11:13Z")

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I’m so glad you posted that link **Bill Door**. I think I’ve finally convinced my fiancee that we’d be better off if we sold this place now before they condo association raises the fees again.