This property is empty land - 5 acres. I have held it for 30 years. Would an installment (2 payments in separate years) help.
2007-09-28 02:29:19 · 7 answers · asked by SHIRLt 1 in Business & Finance ➔ Renting & Real Estate
Don't report the actual price
2007-09-28 02:37:17 · answer #1 · answered by shufly 4 · 0⤊ 3⤋
Not really. If anything, an installment agreement may actually boost your tax as the interest paid on the installment agreement will be taxable as ordinary income. Of course you'll have the additional interest income so you'll still come out ahead.
The gain will be taxed at a flat rate, normally 15%, regardless of whether it's all taxed at once or spread over time. Therefore the tax bite will remain the same either way.
Merely reinvesting the proceeds will NOT get you off the hook as suggested by another poster! There is no such rule at the Federal level.
You can defer the gain if this is investment property by doing a Section 1031 exchange however eventually the taxes MUST be paid. Since the status of capital gains taxes in the future is an unknown, and since you know the rate today to be a low 15%, it may be best to just bite the bullet and pay the taxes now.
2007-09-28 02:35:41 · answer #2 · answered by Bostonian In MO 7 · 4⤊ 1⤋
Your question is better answered by a tax accountant.
He can go over the different options.
1031 Exchange for example.
P.S. Don't be a cheapskate and say you don't want to pay a couple of hundred dollars to sit down with a tax accountant and save literally thousands of dollars.
P.S.S. I see people do this all the time. Stepping on dollars to save pennies. Never ceases to amaze me.
Terry S.
http://www.Welcome2Arizona.com
2007-09-29 15:35:41 · answer #3 · answered by Terry S 5 · 0⤊ 0⤋
Talk to an accountant about a 1031 exchange.
2007-09-28 05:36:20 · answer #4 · answered by godged 7 · 0⤊ 0⤋
The easiest thing to do would be to buy a like kind property. That way, you can avoid paying the tax at this point.
2007-09-28 03:11:58 · answer #5 · answered by bpl 5 · 0⤊ 1⤋
Reinvest it. If you take the money and reinvest it in other realestate then your capital gains would not be as high, but definately talk to your accountant about this. They can advise you, but I do know that if it is reinvested then you do not pay capital gains on what was reinvested.
2007-09-28 02:34:16 · answer #6 · answered by kristen w 2 · 0⤊ 3⤋
Sounds like just another rich loser trying to skirt taxes.
2007-09-28 02:39:04 · answer #7 · answered by Kelly L 5 · 0⤊ 3⤋