2007-06-12 02:14:18 · 5 answers · asked by Yep 2 in Business & Finance ➔ Taxes ➔ United States
If you are selling a rental property, you should be able to do a 1031 exchange.
I have not done one, but basically, you sell your property and the money goes to this "holding station" for up to 90 days I think....could be less. Anyway, You find a more expensive property and use the money to buy that. By doing so, you put off paying the capital gains. I'm sure there are other ways
like trusts and such...
Below is a good article...
2007-06-12 02:21:06 · answer #1 · answered by Anonymous · 0⤊ 1⤋
Doing a section 1031 like-kind exchange will postpone, not avoid paying capital gains on a rental property. Eventually you'll have to pay capital gains on the sale. I have included a link to section 1031 like-kind exchanges.
2007-06-12 09:30:09 · answer #2 · answered by Anonymous · 1⤊ 0⤋
You can defer income taxes by doing a "Section 1031 Exchange" in which you exchange the rental property for another property. However, there is no way to avoid the taxes if you receive cash for the sale.
2007-06-12 09:21:20 · answer #3 · answered by Wayne Z 7 · 1⤊ 1⤋
All the previous replies are correct. However, you CAN avoid capital gains taxes permanently by using 1031 exchanges. The downside to this, sadly, is that you have to die before you can permanently avoid the capital gains.
Good luck !
2007-06-12 10:07:24 · answer #4 · answered by acermill 7 · 0⤊ 1⤋
you can postpone but not eliminate.
you can offset with other deductions.
doncha love depreciation?
looks good on the front end...
2007-06-12 09:54:38 · answer #5 · answered by pops 6 · 0⤊ 0⤋