Legal Question in Real Estate Law in New York
Holding period for avoiding capital gains on home coop
Hello,
I recently relocated from CA to NYC. I sold my condo which last year (8/2003) I owned for 5 years in LA and had a gain. We purchased a coop in New York City 5/2003 and want to upgrade. We have only owned it for one year. If we move to another coop or condo and have a gain on this one, will there be capital gains for this property?
thanks for your help
2 Answers from Attorneys
Re: Holding period for avoiding capital gains on home coop
You must have owned both houses for at least 2 of the previous 5 years and used it as your principal residence, to avoid the second sale gain. I suggest you read pages 111 and 112 of IRS Publication 17 and Publication 523, both available to read at the IRS website.
Re: Holding period for avoiding capital gains on home coop
I would suspect that it is two out of the last five years, just as for a house.
Note that is the period that it must be your principal residence, not merely owned by you. The time need not be continuous, just total two years out of the five preceding sale.
By this definition, you need to keep the NY coop at least one more year, even if you lived there continuously, in order to qualify.