Reinvestment of capital gains

Declaring Reinvestment of Capital Gains in the IRS

If you sold a property and declared it to the IRS, the time may have come to reinvest the capital gains, if possible. You have up to 36 months after the sale to reinvest, as long as it is for permanent housing. Let's see how to declare the reinvestment of capital gains in IRS terms.

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Reinvestment of Capital Gains in Permanent Own Housing

There is an exemption from capital gains if the sale was of a permanent home and if one wants to reinvest in another permanent home, either through acquisition, construction, expansion or improvement.

Thus, there will be no place for taxation of capital gains, at least in the part that was reinvested, if the total gains have not been applied.

Capital gains should be reinvested between the previous 24 months and the 36 months after the sale.

How to Declare Capital Gain Reinvestment in IRS Annex G

It was in Annex G of the IRS, regarding the year of sale of the property, which declared the respective realization.

Admitting that he also declared that the surplus value that he had realized would be reinvested, now is the time to present to your IRS the reinvestment of the capital gains you have made.

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Let's see what needs to be completed in Annex G.

Our Tables 2 and 3, the year to which the income statement refers and the tax identification number (NIF).

Fill Reinvest Capital Equity. Declaring the reinvestment of capital gains.
Model 3 – Capital Gains, Model 3, Annex G

No Quadro 5 – Reinvestment of the Realization Value of Property for Own and Permanent Housing, in field 5001 you must mention the year of realization (sale) of the property.

In field 5002, you must refer to the table and field for that year, where the matrix identification of the good sold appears.

Filling in Reinvestment of Realization Value
Filling in Reinvestment of Realization Value

The value of reinvesting capital gains must be declared in field 5011, if the same was done in the third year, without recourse to credit. If it happened before, it must be declared in one of the previous tables (5007 to 5010).

No Table A1, must declare the identification of the property that was the subject of reinvestment, according to the year in which it was reinvested. The last field, “share in %”, will be 100% if you remain the sole owner. Otherwise, you will have to indicate your share in that property.

Please note the Real Estate Capital Gains Calculation when the declaration was made for the purposes of taxation in the IRS.

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More details on filling in Annex G, in the Finance Portal.


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