“I’m selling my home and will also be receiving money from a settlement and would love to roll it over into a house. I’m not sure if I can though, so if I were to hold the money for awhile, am I charged with capital gains taxes or penalized for not rolling it over into another property within a certain amount of time?”
Answer:
The short answer is no, unless you are selling an investment property and doing a 1031 exchange.
If you are selling your principal residence, tax law changed in 1997 and there is no longer any rollover requirement. If you lived in the home for at least 2 of the past 5 years, you can exclude $250,000 ($500,000 for couples) of gain. No need to buy another home.
Please verify the above with your tax specialist.
