reselling investment property - Posted by Frank Jones

Real Estate Investing
1

Posted by Tom on November 12, 2000 at 12:40:18:

There is no penalty but you have to pay capital gain taxes on any gain plus recapture deprecation.

He can get around this by living in the property, but it must be for TWO out of five years, so he can’t just live there for a year. If he has one than one he needs to see a good tax attorney.

2

reselling investment property - Posted by Frank Jones

Posted by Frank Jones on November 12, 2000 at 11:28:07:

Is there a tax penalty due when selling investment property? My neighbor has recently moved into one of his three rentals. He thinks he can avoid the penalties by living in each rental for a year before selling. His wife is less than happy at having to move (at retirement age) out of the house where she raised her children into their less desirable rental properties.

3

He has options - Posted by KennS

Posted by KennS on November 13, 2000 at 10:17:41:

  1. He can sell them and pay the capitol gain taxes due.
  2. He can live in it for two years and sell it to avoid capitol gains. (I believe he will have to pay the taxes on the depreciation he has taken)
  3. He can refinance and pull cash out and not pay any taxes on it (this will not affect his cost basis when he does sell).
  • Kenn