Can you reinvest sell of second house into land and not pay capital gains?

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1042596

2026-03-10 08:00

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Maybe.

If it is a vacation home or second personal residence that you do NOT rent out, you pay capital gains on the full amount.

There is a complicated business tax break called a 1031 exchange if you rented out the house for a certain length of time.

The rules are complicated and the tax bill is very high if you screw up.

I would suggest hiring a lawyer or maybe 2 lawyers to guide you.

Also, there have been some scams where 1031 exchange agents have skipped the country with victims money from a house sale. Since the victim does not complete the second half of the exchange, the victim owes capital gains tax on the stolen money.

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