I recently sold an investment property with some profit and if I use this money to payoff an home equity line on my primary residence, will I have to pay taxes on it?
2006-12-18 04:33:07 · 4 answers · asked by mrjoe4jrh 1 in Business & Finance ➔ Taxes ➔ United States
YES you will.
Sell some stocks, bonds or other capital assets before the end of the year that will generate a taxable loss that can be used to offset the taxable profit from the investment property.
2006-12-18 09:15:58 · answer #1 · answered by dillon Y 3 · 0⤊ 0⤋
If you sell, none. You don't give the actual numbers. First, the mortgage is a separate issue with the bank. If you treated the property like an ATM, the bank still expects to get paid even if you owe more than the property is worth. Second, you can have two kinds of gain on the property. Gain from appreciation is LTCG and taxed at 15%. Gain from depreciation is recaptured at the ordinary rates, but capped at 25%. If you wish to continue to be a landlord, you could, conceivably do a like kind exchange, provided the new property is worth more than the one you are giving up. See IRS publication 544. A Like Kind exchange simply postpones the tax though.
2016-05-23 04:33:26 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Yes, you will have to pay taxes.
The only way to postpone taxes on an investment property is to exchange it for another investment property. The above transaction does not qualify.
2006-12-18 04:37:38 · answer #3 · answered by Wayne Z 7 · 1⤊ 0⤋
Yes, you'd still have to pay tax on your investment gain.
2006-12-19 05:11:07 · answer #4 · answered by Judy 7 · 0⤊ 0⤋