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My question is: US-specific
QUESTION: I own and live in a two family residence for 30 years. I rent the apt. upstairs. I want to sell and buy a one family. How can I avoid a large capital gain tax? I bought it for 20,000 and want to sell for 130,000. please advise what is the best route for me to take.
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david ingram replies
If you are going to buy a single family residence, you are stuck with the capital gains tax on the rental part of your home.
In other words, if you had a $100,000 profit and rented out 25% of the house, you would report the sale on form 4797 and schedule D and pay tax on $25,000 plus any depreciation you have claimed.
I have sent this out to our email list to see if anyone else has any suggestions. I do not recommend that you look at tax sheltered investments to try and avoid the tax. You are better off preserving your capital for the new home.
Hope this helps
David Ingram
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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