Hello, my name isXXXXX & I'll be helping you today. My goal is to give you a complete & accurate answer that you can understand.
Unfortunately no. What you do with the proceeds of the sale won't shelter the capital gain on that sale.
Do you have a substantial capital gain?
It would be around 120000 in profit
What type of organization is your business?
it is an llc
OK, but how does it file it's income taxes?
as a partnership
So you own the property that you are selling, but you have other partners in the partnership?
Right now the property is in my name and my wife's name. We bought the property over a year ago and did substantial improvements on the property. We do not have any other partners in the partnership, just my wife and I
Are you taking back any financing on the sale?
no it would be a cash sale
And the gain you are figuring is after giving credit for the improvements?
yes, plus there would be realtors fees that we would have to pay, but I figured those into the equation to come up with the profit number
Unfortunately, in order to have unlimited access to the proceeds from the sale, you'll have to pay the tax.
and the tax would be based on my tax bracket since I have had the property for longer than a year, correct?
so there would not be any advantage to putting the property in the business name and selling it that way compared to selling it under our names as the owner?
Well, it would be a capital gains rate, which rate would be based upon your tax bracket.
No. As a partnership, that is considered the same as owning yourself anyway.
okay thank you for your help with this question
How long have you been using the partnership method for filing the llc taxes?
OK, oh there are now ways to eliminate filing a partnership return for Husband - Wife partnerships, but it involves splitting everything and filing 2 Schedule Cs, so in your case it may be more cumbersome anyway.
I'll leave my contact information here in case you have any future questions I may be able to help you with.
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