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question for taxmanrog, I am having trouble trying to decide whether to take a 1031 exchange or just pay the taxes on the rental property sale I have asked you about before. The property is being sold for let's say 200k and I have a basis of 70k. I have 100 k in capital losses I'm carrying and want to sell a residence which will have a 50k profit above the exclusion . I am wondering whether I would be doing myself a favor if the capital gains taxes are increased again in the future or if leaving the funds in the bank is a great idea.
would you still have the same opinion if the figures where 5 or 10 times these amounts? What would be a safe solution to park the after tax dollars? It could be possible if that if the economy worsened the Cyprus style banking issue could happen here. One of my thoughts is having funds deployed in income property could offer some protection in that sense, which brings me full circle to the 1031 idea.
when you say invest globally, what ideas come to mind? Why do you say gold is not your personal favorite? if not what is?
Wen I say invest globally, I meant that you can find both mutual funds (my preferred method) and individual stocks from areas all over the world. You can find mutual funds that invest in Asia-Pacific, Europe, China, South America, Africa, Canada, etc. By investing in these, you can spread your risk of loss over the world's economies. In our recent memory, while the US was in recession, China and Germany were doing well. Now, when the Chinese economy is slowing down, the US economy is starting to pick up. By investing with a global point of view, you can minimize your risks.
I don't like gold because of its limited profit potential. I remember back in the late 1970s, when I started investing. Silver was at $30 per ounce, and gold was at $900 per ounce. Now, 35 years later, Gold topped $1700 last summer, and is now back to $1273, and silver is now at $20. So if you had invested in and held gold, you would have made $373 in 35 years, and with silver you would have lost money. So I am not a big fan of these.
I hope this helps you out!
Thanks again, and have a great week!