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Do I pay captial gains taxes when I sell my investment property if it is the only property I own?

I currently own an investment property in Florida and I am looking to sell it. I bought it in 5/2004. I currently rent an apartment in San Francisco and so the only property that I own is that one in Florida. I'm aware of a capital gains tax that you must pay any time you sell an investment property. What I'd like to do is avoid paying this tax if possible. I've heard that because it is my only property, it does not qualify as an investment property and so I wouldn't have to pay this capital gains tax. Is this true?

Public Comments

1. No. You pay capital gains taxes on any capital you own for more than one year. If you own a home that you lived in for more than one year and sell at a profit, you will have to pay capital gains tax.
2. No But, You can do what is called a 1031 Exchange. Which mean you can sale your current property and the proceeds of the sale can be reinvested in an asset of a similar kind od property (like kind asset), then no capital gain or loss is recognized, this allows the deferment of capital gains taxes that would otherwise have been due on the first sale.
3. You will have to pay a capital gains tax on the profit (sale price less purchase price and less cost of capital improvements if any) unless you exchange it for like kind property under IRS SEC1031. Do not even THINK of doing a 1031 exchange without professional advice.
4. You have to have lived in it for at least 2 years out of the last 5 years in order to avoid gains tax. 1031 Exchange defers your gains when you reinvest your money quickly. Ask an accountant though...they are touchy to do.