Capital Gains
Is there anyway to retain the cash appreciation without incurring the capital gains? We have a condo under contract and would like to use some of the cash before reinvesting it into a new property.
Is there anyway to retain the cash appreciation without incurring the capital gains? We have a condo under contract and would like to use some of the cash before reinvesting it into a new property.
It is not really clear, but I assume you are selling a property. Is this property you are selling a principal residence, a second home, or an investment rental?
It is a rental prop that we have had for almost 2 years. We want to do a 101, but, we also need some cash.
Hi,
So, is it true that if you hold a property less than one year and sell it, there are no cap gains tax due? I am closing on a rental prop in FLA soon, and just received an offer for $40K more. I can reinvest into another condo or take it out and pay regular income taxes on it, is that right?
Thanks for your help.
Quote:
On 2005-04-07 18:23, REFLA wrote:
Hi,
So, is it true that if you hold a property less than one year and sell it, there are no cap gains tax due? I am closing on a rental prop in FLA soon, and just received an offer for $40K more. I can reinvest into another condo or take it out and pay regular income taxes on it, is that right?
Thanks for your help.
Given that long term capital gains tax is less than ordinary income tax, there is no tax benefit in selling earlier than 12 months after you buy. However, if you have a more profitable opportunity and paying a higher tax in the short term makes sense, go for it.
Quote:
On 2005-04-07 18:23, REFLA wrote:
Hi,
So, is it true that if you hold a property less than one year and sell it, there are no cap gains tax due? I am closing on a rental prop in FLA soon, and just received an offer for $40K more. I can reinvest into another condo or take it out and pay regular income taxes on it, is that right?
Thanks for your help.
If you sell it within one year of purchase, taxes are going to be higher than capital gains rates. Property purchased with the intent of resale is not eligible for a 1031. You would probably need some way to prove you intended to hold it as an investment.