taxes - Posted by Stewart

Posted by Ronald * Starr(in No CA) on September 08, 2003 at 10:35:20:

Stewart------------------

Yes, if there werr two loans, it is possible that there might be some capital gains tax due of the sales date were too long after the owners moved out.

I can’t comment on the other part of your discussion.

Good Investing************Ron Starr************

taxes - Posted by Stewart

Posted by Stewart on September 07, 2003 at 18:48:03:

Okay, here is a good question I haven’t seen. For those that are doing l\o for getting homes, how often does the 2 of 5 rule come up? If someone is having trouble selling their home and you come in helping them out by doing a l/o deal with them, AND, it doesn’t sell within 3 years as I understand it, they lose the exemption for a personal residence (this assumes they were in the house for 2 full years already). What am I missing? I would think they might get pretty angry when this happens.

Re: taxes - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on September 08, 2003 at 24:58:02:

Shewart------------

I think you are right. But one probably should not be using a lease option to buy with anyway. One should be doing a deed subject to existing financing.

But if you are doing a leas option, I suppose it had better be fore less than 3 years so they can get the property sold while they can still take the capital gains exclusion.

Of course, the “no equity” deals usually don’t have much profit to the sellers to be taxed anyway. So it is probably moot for them.

Good Investing************Ron Starr***************

Re: taxes - Posted by Stewart

Posted by Stewart on September 08, 2003 at 08:25:06:

Thanks for your input :slight_smile:

You bring up a good point I commented on somewhere else here and not sure I got that right, but, I am pretty sure no equity doesn’t mean there is no gain. Your basis doesn’t change because you get a 2nd so it can be a trap for some.

I wonder if some might do a l\o (sandwich?) but then guarantee a sale via sub2 if t/b doesn’t purchase. With all the l\o people out there, this must have come up.