· Duplex in Berkeley CA.
· Purchased in 1992 as a TIC for 236K. I owned half.
· 1997 purchased the other half for 80K and refinanced the loan-now 310K or so.
· 2004 borrowed against the property for own business, property now valued at 850K.
· Current loan balance is 720K.
· Property-if sold today at 760K would break even with brokers fees.
· If I sell, do I owe capital gains tax on the appreciation since 1992 even though it is now owed to the bank?
can you confirm that capital gains tax would be 15%? If so, then my capital gains tax owed would be $84,000 based on a sale price of 760K. Is there any way to avoid this? if I can scrape together 84K cash and use it to purchase another home, can I avoid it this way?
Also-does the tax apply to just the home value or the total selling price including broker fees?
If for example the selling price is 720 + 40K broker fees, then does my cap gains change to 78K?
I think that I do have suspended passive losses as it is a duplex and I rent one of the units out and live in the other.
I will make an appointment with a tax attorney to dig into this.
Thank you very much for your help. I tried to rate you Excellent but had trouble getting the rating to "stick". If you would like me to try again, please let me know the best way to do it.
Thanks again-not good news, but I know where I stand.
Thank you! That is very helpful. I will get in touch with a CPA. Also-please feel free to use Excellent as my rating and to forward this message to them if you like.