How do I trade 3 properties for one larger while avoiding tax consequences?
Answers: what you are asking about is covered (rather complex, though) by section 1031 of the internal revenue code. A rather simplified explanation is that it allows one to do just what you ask on properties without recognizing any loss or gain (called nonrecognition) of income by the transaction. However, and this is a big however in your case it seems.all of the property sold and the property acquired must be held for investment purposes, so not your homestead. Since the one property you are acquiring is to be your homestead, it will not be viewed by the IRS as an "investment" property and, thus, you will likely not be able to do a 1031 exchange to delay the recognition of the gain on your two current investment properties (and your one homestead property would be covered by the relevant 2 year holding period for determination of whether that's exempt from income taxes).
EDIT: There are creative ways around all of this, though, but you have to follow the rules pretty carefully. One way to do it would be to trade your two investment properties in for the one new one and then hold that for investment purposes (usu. by renting it out for some period of time) while still living in your current one. Once you have done that and satisfied the rules of 1031, you can sell your homestead in a separate transaction (because eve if allowed as "boot," a technical 1031 term (really, I'm not making that word up) it would be subject to recognition of gain if within the 2 year period), then move into the one property you wanted in the first place, changing it from investment property to homestead. A bit complicated, but depending on the tax amounts and your desire to avoid it, it's at least something to explore (but simply "offering" the new place for rent, and then moving into it likely won't satisfy the IRS as holding for investment purposes.Lots of Tax Jurisprudence on this issue). Thankfully, there're real estate lawyers who specialize in just what you are looking for if you really want to avoid the taxes.
Oh, and it isn't tax evasion if you actually do buy the new property and do hold it for investment purposes and do rent it out. Sheesh. It certainly could be, though, which is why I said you have to follow all of the rules carefully, and that there is a lot of tax jurisprudence on the issue that specifically addresses people who have tried to sham the system. There are holding time requirements you have to satisfy. But buying a new investment property, and then down the road changing it from investment property to homestead is not tax evasion and is a very valid, widely used technique, but you need to enlist the help of good lawyers to structure the transaction so that you ARE in the clear and not evading taxes. The interpretation and enforcement of the law isn't black and white.if it were, no lawyer would have a job.
You can't. Tax-free exchanges are only for investment to investment, and you cannot "combine" real estate.
So if you are trying to sell 3 investment properties to buy a primary residence, you'll owe the tax.
There isn't anything complicated about the law...it is what it is. Any CPA will be able to rattle it off the top of their head without even looking it up.
No loophole around it unless you want to commit tax fraud (and that is EXACTLY what one of the other posters has suggested...and if you want to go that route, fine, but be prepared to be charged with tax evasion)...that is the biggest reason why I haven't sold some of my rentals that don't bring in as much as I would like.
I overpaid on my rent within 2007, am I entitled to this money?
I was giving extra to the headship company in the first quarter of 2007 so I would be sure to be okay surrounded by the first quarter of 2008 (I had fairly a bit of extra money then). They do have to justifiably post that to my account right?Answers: Yep your overpaid rent is still your money. Check your contract next to your management company going on for notice required to return your justification balance. You are entitled to any get support the overpaid rent, or stop paying rent while you have a positive harmonize with the company. After adjectives that's why you gave them the money to hold onto it for you. Either road I would send them a communiqu¨¦ with your request.
Just maintain in mind you give an interest free loan to the management company. Consider putting windfall money into a money flea market account or other large interest account.
Although I know of several commission base sales those that overpay their rent for peace of mind in baggage they have a few impossible months.
I would say YES.
But if they are trying to attain away with keeping it, I hope you enjoy proof of what you overpaid.
The month you overpaid, the extra money would have be posted to the following month as a liability on the Management Company/Owner's books. Then, each month, that liability would be turned into income and when you offer them the rent for that month, it would automatically become a liability for the following month.
A property is not here to 4 folks,from relative,no will,not adjectives wont to market.?
Has one the right to ask for his share in money from the other three,if they send regrets to pay,can the property be made to shift on the market?Answers: Threaten to rent your share (1 room) of the property out. Once they've get just one sitting tenant surrounded by there it will produce it more difficult for them to do ANYTHING.
You need to gain an appraisal done on the property first.
If the property has be thru- probate you will need to see if in attendance are any liens or incumberances on the property. If you find it is free and clear then you can ask adjectives teh hold outs to purchase your portion of that property. If they still refuse you can lift them to court and force them to do one or the other. But at what cost?
Is it really worth the court costs. attnys fees etc? And then above adjectives else i`m assuming here your family member.
yes you have the right.
catch a valuation .then the others buy your share