Sale of California Property due to work relocation

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Sale of California Property due to work relocation

Post by SHSHSH »


Hoping I can get some input if you have dealt with similar matter:

Closing Date: November 1, 2022 ~ $1M
Selling Date: April 2022 ~ $1.3M
Gain on Property $300K
IRS exclusion when moving due to work relocation = (November to April) / 24 = 6 / 24 x $500K = $125K
Taxable Gain = $175K
Given the sale of property within a year, this is going to be considered as ordinary income
Purchased another property in WA state

1. Can 1031 exchange be leverage by utilizing the Canadian property (not rented) as a primary residence even though I lived in California property?
2. Can the tax be further minimized other than the standard vs actual deduction?
3. Can this be still considered as capital gain under IRS rules instead of ordinary income given the work relocation reasoning?

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