Capital Gains Tax

I bought a pre-construction condo early this year for $350k. I only put in $30k to reserve the condo. The building would not be ready until early next year. One of the condo in the same building sold for $600k this month. The agent asked me If I want to sell the condo at that price. This will mean a cap gain of about $250k at the time of closing. Since I would not own the property for more than a year the taxes will be calculated as short term investment. What options do I have to defer the cap gain? Is 1031 even an option as the unit will never be on my name?

Please help. Thanks

Comments(2)

  • wexeter29th July, 2004

    The 1031 Exchange is not an option since you do not own an interest in real estate. You would actually be selling a contractual right to purchase the condo, not selling a real estate interest.
    [addsig]

  • partyush29th July, 2004

    Would this be treated as like "option purchase" and the clock to determine whether this is a long term investment will start at the time I put in the reservation deposit. In other words, if I put in the reservation deposit on Jan 30, 2004 and sell the contract on Feb 2,2005 and the property is never transferred to my name..is this really a real-estate investment or I can treat it as a long term regular investment (like buying options in stock market)?

    Thanks

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