• It sounds like you have already tried the refinancing route since you mention bad credit and that you are uncertain about your ability to pay for both properties in the future. I'm also assuming that you aren't in foreclosure right now. You may want to consult with a bankruptcy attorney to consider a reorganizational bankruptcy since that should create an "automatic stay" and essentially freeze the sale of your assets until you can work things out with your creditors/court.
  • I need to clarify my question, I don't have bad credit now, credit score is about 650 due to credit card debt, I want to know if I can roll over sale proceeds to my primary home loan and not pay capital gain?
  • I don't know about CA state - but most states follow the federal guidelines. I had a tricky Capital Gains issue that I researched on Motley Fool with great success. Otherwise, for something this specific and in depth, I would consult a tax attorney who specializes in gains issues. That is a lot of money to have the IRS come after! And don't forget - the tax is only on THE GAIN, not the whole sale amount, so it shouldn't put you in the hole financially unless you have taken out significant equity loans. It also might involve you buying your house from yourself in order to apply the funds (instead of throwing it at an existing mortgage) which is what we had to do.

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