can the sale of a second home qualify for a 1031 exchange?

[Accountant-Man]

Assuming that you called it a second home because it is not a rental, no.

[wadams37]

It was a second home used for personal family use, and never a rental. They have an approximate LT capital gain of $90,000. So I just report the transaction on Sch D? They never received a 1099-S or 1099-B since the home was located in WA state and they are residents of CA.

Will the state of WA also tax the income because CA surely is??

Thanks,

wadams37

[qbteachmt]

I found these IRS resources for you:

https://www.irs.gov/faqs/capital-gains-losses-and-sale-of-home/property-basis-sale-of-home-etc/prope...

https://www.irs.gov/faqs/capital-gains-losses-and-sale-of-home

And I found this one:

https://www.calcpa.org/public-resources/ask-a-cpa/tax-tips/capital-gains-losses/must-i-pay-capital-g...

[Accountant-Man]

WA has no state income tax.

[qbteachmt]

WA has a real estate excise tax, though.

[wadams37]

Can the WA excise tax be deducted as a Real Estate tax on Schedule A?

Thanks,

wadams37

[qbteachmt · Accepted solution]

It's not a property or sales tax. As a cost of selling, it would reduce the gain on the property.