Tax Advice
Okay, I'll try to make this short.
I bought and rehabbed a home 1 year ago (bought at 135k). I used the heloc on my home to do fix up (approx. 35k). I then increased the value dramatically and opened a heloc on the rehabbed home. I then used this to pay off the lien against my home as well as purchase two more rentals. I also rented this house for 1yr. Now, I'm listing the home- just into my second year of ownership- at 319k. I expect to pay about 22% or roughly 30k to the IRS, any suggestions on ways to reduce this amount? I've been told to buy a business car and write it off...is this a good suggestion or does anyone have any advice at all. I still, if I get full price, stand to walk w/ 90k before taxes but every penny counts.
Thanks for the advice.
I was told that I couldn't do a 1031 exchange due to the fact that I have a heloc on the property which I have used a good bit of to purchase other properties...is this incorrect? I just assumed that since I've 'spent' some of my capital gains this option did not work for me....
I think you have to consider the source of your information. Is this person a licensed tax professional? If so, how well versed is this person in the intricacies of a 1031 exchange?
In my humble opinion, refinancing your rental property, then using the cash for other investments, does not disqualify your property from future participation in a 1031 exchange.
wexeter is a 1031 specialist. Send him a private mail to get a expert opinion.