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Laurie Wrote: I have a specific question about this. I purchased a piece a property about 8 years ago right before the Real Estate market in my area crashed. I have been sitting on it this entire time and am now ready to build. If I build a home do I still have to hold on to it for a year or more or since I've had the property for so long does that count towards "holding on to it". Curious...
Good question. Did some reading up on this.
Tax Aspects of Home Ownership: Selling a Home
Avoiding Capital Gains Tax When Selling Your Home: Read the Fine Print
I recommend giving these a good read through. From what I can tell, you have to live in the house for at least 2 years to qualify for capital gains tax exemptions, that go up to $250,000 (on profits made for the sell of the house) or $500,000 if married.
And the profit (or capital gains earned) is the cost of the land and the cost of the house build (including any and all expenses like paying contractors, architects, etc), minus the total you sell it all for.
So, to answer your question simply, from all I read, the house would still count as a short sided sell. But I don't think the land would. Difficult to say for sure though. I would lastly recommend talking to lawyer or tax consultant on this one. Seems very complicated and not very straightforward info online for you.