Re Investing Capital Gains
I'm selling a home that was a rental to my daughter. (For less than the home is worth) My question is If I Put the monies received on another mortgage is that reinvesting? To keep from paying the gains tax? I live in Michigan. Thank you so much for your time ahead of time. 
You may want to talk to your accountant/CPA about doing a 1031 exchange. Also you could spread out your capital gains tax if you carry part of the financing.
I sure wish I understood all of this. But thank you for such a quick response. I'll try the acct. Thank's again. Dawn
Quote:I'm selling a home that was a rental to my daughter. (For less than the home is worth)The difference between your sales price and the FMV of the property is a gift. If this amount exceeds $11K, the excess must be reported on a Gift Tax Return and filed with your annual Income Tax Return.
Consult your personal tax advisor for specific details.
Quote:My question is If I Put the monies received on another mortgage is that reinvesting? To keep from paying the gains tax? The money you receive from the sale of your investment rental property is a taxable capital gain. It does not matter what you do with the money after you have it in your hands -- it is still taxable even if you invest this money somewhere else. Additionally, since you are selling depreciable investment property, you will have a depreciation recapture tax.
If there is a sizable taxable capital gain, you can acquire a replacement investment property in a 1031 like-kind exchange. A successful exchange will allow you to defer the capital gains taxes until you sell the replacement property (if you ever decide to sell).
Consult your personal tax advisor for specific details.
If you sell the property and receive all cash (i.e. no note carry back/seller financing), the paydown or another mortgage is not considered to be reinvesting pursuant to Section 1031 of the Internal Revenue Code. In order to qualify for a 1031 exchange, you must sell a real property interest and acquire a replacement real property interest and paying down a mortgage is not acquiring a real property interest because you already own the real estate.
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