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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15437
Experience:  15years with H & R Block. Divisional leader, Instructor
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Are there any taxes advantages in using capital gains thru

Resolved Question:

Are there any taxes advantages in using capital gains thru the sale of stocks to buy investment rental property
Submitted: 8 years ago.
Category: Tax
Expert:  Robin D. replied 8 years ago.


The biggest difference when it comes to tax advantages between real estate and taxes is the sale-buy situation. With stocks, you sell shares in one company and buy in another. When this occurs, you must pay taxes on the sold shares regardless of the fact you turned around and made another purchase. Unless you count a Rollover.

You may qualify for a tax-free rollover of certain gains from the sale of publicly traded securities. This means that if you buy certain replacement property and make the choice described by the IRS, you postpone part or all of your gain.

You postpone the gain by adjusting the basis of the replacement property. This postpones your gain until the year you dispose of the replacement property.

Since you did not buy other stock but purchased real estate you may not count this as an exchange of investment proprty for investment property and fore go tax on the gain.


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