What are some ways a property owner can sell without paying capital gains? It is not his primary residence.?

Question

It has been vacant for several years and he does not plan to buy anything else right away.

Answer 1

No real way around it. The federal government wants its money and this is how they build there coffers. If you outright sell and it is not a primary residence you owe on the money made (it is a form of tax).
Now if you do a 1031 exchange, you do not have to pay the capital gains. Talk with a Real Estate professional and they can explain how this works. There are always buyers and sellers out there that can only use this option. It just may take a little longer to sell.

Answer 2

The 1031 exchange is for property used in a trade or business. Property that has been vacant for several years would not qualify.

If the owner gifts the property to persons who owe less tax than he will owe (perhaps young adults over 18 with little income), then the capital gains tax may be less than if the owner sold it.

If the owner waits until 2010, the lowest capital gains rate is going to drop to zero (under very restricted circumstances, and for only a small amount of gain). So hanging on for a couple more years will reduce the tax.

If the owner sells the property under an installment contract (owner financing), he will spread the gain on which capital gains tax is paid over a number of years. However he will also have interest income and that will be taxed.

He could also move into the property for two years and avoid capital gains ($250K, $500K if married).

Answer 3

The only way to defer the taxes is to exchange the property for another property (Section 1031 exchange).

If he receives cash/debt relief at closing, he will have to pay taxes. No way around it.

Answer 4

there is not any criminal way of doing it. If one replaced into so susceptible and if the abode replaced into in the comparable state that they at present lived in.... then one would desire to document the abode exemption on the abode they had to sell and cancel it on their genuine abode. Wait a year and then sell it claiming it replaced into their abode. one would desire to circulate the abode right into a believe which does no longer be a taxable adventure. and then sell the abode in the time of the believe and distribute the money to themselves (its a scheme or artifice to avert paying taxes so it would technically be unlawful). or you will desire to easily bit the bullet sell it pay the capital constructive properties tax on it and be grateful you probably did no longer would desire to pay taxes on the traditional income fee.