2006-06-22 13:35:05 · 5 answers · asked by efriend1969 1 in Business & Finance ➔ Renting & Real Estate
You will pay capital gain tax if you do not roll it over in accordance with the rules governing section 1031 exchanges. If you buy another property and do it in accordance with this section of the tax code, you will not have to pay the tax. Look up the rules governing this type of exchange. Basically, if you put the funds in the hands of a "qualified intermediary" and buy similar investment property, you will not have to pay any tax as long as you do so within the time periods set forth in this section.
2006-06-22 15:58:36 · answer #1 · answered by spirus40 4 · 0⤊ 0⤋
Educate yourself on doing a 1031 exchange, or find a realtor that knows about them
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2006-06-23 12:42:43 · answer #2 · answered by Anonymous · 0⤊ 0⤋
You will need to be capital gains tax on your profit.
Don't forget-- if you have been taking depreciation expense on your rental property, you will need to add that back in.
For more information , go to the IRS website:
http://www.irs.gov
2006-06-22 13:39:16 · answer #3 · answered by ps2754 5 · 0⤊ 0⤋
IRS Publication 544, Chapter 1, page 4 on Gain/Loss
http://www.irs.gov/pub/irs-pdf/p544.pdf
2006-06-22 13:42:41 · answer #4 · answered by Mr. Wilford 3 · 0⤊ 0⤋
As per spirus40 - please note that the 1031 is a tax-deferred exchange. You will have to pay taxes at some point in the future, with some specific exemptions. Please see my answer to the previous question in Real Estate under inherited properties.
Write if you have more questions at sean@rmfa.com
2006-06-22 16:23:00 · answer #5 · answered by trblmkr30 4 · 0⤊ 0⤋