Need Avice On Proceeds From Sale Of Investment Property
I am just getting started in this, bought my first property last year and 2nd this year. My dad called asking for advice and I told him I would check into it and see what i can find out.
My dad has a property owned in an LLC name, the property is owned free and clear. He plans on selling and will probably get around 175k for it. What could he do with the money to keep from getting nailed so hard in taxes?
Ideally he would like to transfer the proceeds into a life insurance annuity which is in the same LLC name. Is this possible, and what kind of tax/penalties should he expect to pay?
If your Dad owned the property for over 12 months, and is not in the business of buying and selling property, the profit portion of the $175K (after deducting purchase price, upkeep, taxes, etc, etc) will probably be taxed at the 15% capital gains rate.
He can then do anything he wishes with the after tax proceeds with no additional tax/penalties.
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