John, I need capital gains help! - Posted by Shelley

Posted by Earl on July 13, 2003 at 05:44:08:

John or anyone, a question on that. Isn’t it true when you sell via 1031 exchange you not only avoid the long term capital gains tax, but you also defer the recapture on depreciation, (which could be a lot) you also avoid placing yourself into a higher tax bracket so you may avoid or defer some ordinary taxable income, and and you may also defer state tax as well? (in some states) so that overall, the capital gains tax may be only a small portion of the taxes you may avoid/defer. All the more reason for doing 1031s’. Do I have that right?

As always, thanks for everyone’s great advice.


John, I need capital gains help! - Posted by Shelley

Posted by Shelley on July 09, 2003 at 16:13:58:

We recently sub divided our property into seven lots, which is zoned residential. Our principal residence is one of the seven lots. On one of the lots, we would like to build a new house. Would building a new house for ourselves on one of the lots help us in lowering our capital gains tax? If not, what is our best option for minimal capital gains when selling off the lots?

PS: Selling our principal residence is not an option at this time.


Re: John, I need capital gains help! - Posted by JHyre in Ohio

Posted by JHyre in Ohio on July 12, 2003 at 12:20:00:

Sure, if you live in the new property for 2 years, you can sell the home + lot without paying tax on the first $250k/$500k of gain. Ohterwise, a 1031 exchange is the only way I see to avoid long-term capital gains…which are currently taxed at 15%.

John Hyre