Posted by RC on February 27, 2002 at 23:16:30:
You can do a 1031 exchange - buy to offset the capital gains. This is common practice and a way to exponentially multiply your holdings with indefinite tax deferral.
depreciation - Posted by gregg (fl.)
Posted by gregg (fl.) on February 27, 2002 at 15:49:19:
Just went to my accountant and was told that after several years of owning this rental property, if i decided to sell,i would have to pay all those taxes i saved during this time period. is that true or can i buy something of equal value to offset the costs? or do i have to move into the place for 2 out of 5 years before i sell it?..constantly learning, anyone have more info. or a good accountant to refer me to in florida…thanks
Re: depreciation - Posted by Ian(Honolulu)
Posted by Ian(Honolulu) on February 28, 2002 at 02:35:05:
If you’ve been taking depreciation tax breaks off of the property, you must recoup them when you sell. Living there 2 years as you mentioned will qualify you to not pay capital gains taxes up to $250,000 (500k if married). However, this does not include the depreciation you took. It only includes gains from appreciation on the house since your original purchase. I believe you must also recoup depreciation on a 1031 exchange, however am not solid on this. You might want to consult a tax attorney. If you need the money, why not take out equity in your home? It’s essentially tax free. It’s a coined strategy for expanding. Just throwing my two cents your way… take it if you like.
-Ian