If you’re selling a property in Omaha, you may be wondering: Can I avoid capital gains taxes by buying another house? This is one of the most common questions property owners ask—and one of the most misunderstood.
The answer is sometimes, but not simply by purchasing another house. The IRS has specific rules that determine when capital gains apply and when they don’t. Understanding those rules can help you make a smarter decision before you sell.
What Are Capital Gains Taxes? (IRS Basics)
According to the IRS, capital gains occur when you sell a property for more than its adjusted purchase price. The gain is generally taxable unless an exclusion or deferral applies.
At the federal level, capital gains are governed by the Internal Revenue Code. In Nebraska, those gains are typically included as part of your state taxable income.
If you plan to sell a house fast in Omaha, it’s important to know how much of your sale price you may actually keep after taxes.
Buying Another House Does Not Automatically Avoid Capital Gains
Many sellers believe that buying another house will automatically prevent capital gains taxes. This is not supported by current IRS rules.
The IRS eliminated the old “rollover” rule for primary residences in 1997. Under current law, purchasing another house does not cancel out capital gains on a sold property.
Whether you owe capital gains depends on how the property was used—not what you buy next.
IRS Section 121: The Primary Residence Exclusion
The most common way sellers avoid capital gains comes from IRS Internal Revenue Code Section 121, explained in IRS Publication 523 (Selling Your Home).
You may qualify if:
- You owned the property for at least 2 of the last 5 years
- You lived in the property as your primary residence for at least 2 of the last 5 years
- You have not used the exclusion in the past two years
IRS exclusion limits:
- $250,000 of gain for single filers
- $500,000 of gain for married couples filing jointly
Importantly, the IRS does not require you to buy another house to use this exclusion.
Partial exclusions may apply
IRS Publication 523 also allows partial exclusions if you sold due to:
- A job relocation
- Health-related reasons
- Certain unforeseen circumstances
This is especially helpful for Omaha sellers who needed to move sooner than planned.
IRS Section 1031: Investment Properties Are Different
If the property you’re selling is a rental or investment property, the IRS treats it differently.
Under IRS Internal Revenue Code Section 1031, explained in IRS Publication 544, sellers may defer capital gains by completing a 1031 exchange.
This option is commonly used by experienced Omaha property investors.
IRS 1031 requirements include:
- Both properties must be held for investment or business use
- A replacement property must be identified within 45 days
- The purchase must be completed within 180 days
- Sale proceeds must be handled by a qualified intermediary
A 1031 exchange defers taxes—it does not eliminate them permanently.
When Capital Gains Are More Likely to Apply
According to IRS guidelines, capital gains are more likely when:
- The property was never your primary residence
- The house was a short-term flip
- The property was inherited and later sold at a higher value
In these situations, sellers may prioritize speed and certainty—especially when facing financial pressure or seeking Nebraska foreclosure help.
Why Selling Fast Still Makes Sense
Even when capital gains apply, many sellers choose to move forward quickly. Reasons include:
- Avoiding foreclosure or legal action
- Eliminating repair and maintenance costs
- Selling without agents, showings, or delays
- Getting certainty during a stressful time
A knowledgeable local buyer can help you navigate these decisions with clarity.
How GWP Ventures Helps Omaha Property Owners
At GWP Ventures, we help sellers understand their options before making a move. As a trusted Omaha property investor, we buy properties as-is and close on your timeline.
Whether you’re selling an inherited house, rental property, or need to sell quickly, we provide fair solutions without pressure or confusion.
Final Thoughts
Buying another house alone will not automatically help you avoid capital gains. IRS rules—specifically Section 121 and Section 1031—determine whether gains are excluded, deferred, or taxable.
Understanding these rules early can help you avoid costly surprises and make the best decision for your situation.
👉 Ready for a fast, fair property solution?
Contact GWP Ventures today to discuss your options and sell your property in Omaha with confidence.
Important Disclaimer
This content is for informational purposes only and is based on general IRS guidelines, including IRS Publication 523, IRS Publication 544, and the Internal Revenue Code. It does not constitute tax, legal, or financial advice. Always consult a qualified tax professional or attorney regarding your specific situation.