question Rachael F : Is there potential for capital gains tax on the rent, with no other real estate in to avoid re-invest?
I moved to a new state and have two of my home state, a main residence and a duplex unit. I already bought a new house on a mortgage 80/20. I would like the proceeds from the sale of my old houses (a) payment of 20% share of the mortgage and (b) pay credit card debt to us when my husband was unemployed repaid. Neither house has not sold and the duplex unit is not for sale because for itself and then some to pay. But I can not handle outside of the state forever. Finally, I have to sell the duplex. I transfers of 1039 as a means of avoiding capital gains is one, but my kids are older now and I prefer to find a traditional job as a time of management to another body. Is it possible to use the profits from the sale of the duplex to my advantage, without a tax grab and without investing in real estate again? Then “invest” it’s me in the new house I bought in April? Fund education? IRA? All Best Answer:
Reply from
mhaize I
think you can this by doing money into a Roth IRA. The laws are much more tolerable to Roth
Classics 401 (k).
post answer to this question below!
You’re stuck. The 1039 rules refer to a “like kind” exchange, which if you start with real estate, ends up in real estate. But you have options: (a) Get a management company to run the place; they usually charge about 10% of the rent. (b) Sell the duplex, and put the proceeds into vacant land via a 1039 exchange. Basically no management hassles. (c) Sell the duplex, and buy rental property close to your new digs with a 1039 exchange. Then you can manage it yourself.
Yes, talk to your accountant regarding sale of primary / secondary residence.
The sale on duplex, you may have to bite, unless you convert it into another secondary residence (after the sale of the house at your former state).
There’s great savings potential in planning these sales, talk to your accountant, as there are details here that you may need to know. Can’t answer your question with limited detail.
Goodluck,
You have up to 3 years (exactly) from the time you moved to sell your ex primary residence TAX FREE, assuming that you lived in it for 2 years before you moved away. Price it right and offer a higher commission to a selling agent. It works.
You don’t have to manage property yourself. Get a professional manager. It’s not a 1039 exchange, it’s a 1031 Exchange. You don’t avoid taxes forever, you just defer them.
What’s wrong with paying taxes if you have a long term gain, the tax rates arent that high. Selling the property could become the biggest mistake of your life. People have made fortunes by holding property long term
Section 121 of the tax code allows you to sell your primary residence and pocket up to $ 500,000 of capital gain in your pocket. You may want to use that money to pay off some debts.
A 1031 exchange allows you to re-invest in other investment property and not pay the capital gain. Have you ever looked at triple net leased property? Talk with your local real estate broker because the properties typically do not involve any property management once the lease is signed.