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I purchased investment property with a second from my primary

home, I sold the property...
I purchased investment property with a second from my primary home, I sold the property and need to know what options I have to minimize the tax impact. Can I use the proceeds to pay off the second and put the remainder against my first mortgage and not be taxed ?
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Answered in 10 minutes by:
5/31/2013
Phillip B, EA
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 704
Experience: Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.
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Thanks for using JustAnswer.com!

 

Unfortunately, if the sale has happened it is probably too late to do anything about the tax implications.

 

You could have done a section 1031 exchange (have a third party by a new investment property with the proceeds of the sale) if you would have planned things out prior to the sale. However, once you received a check or cash from proceeds on the sale, the gain in irreversibly taxable.

 

If there are further questions, please reply to this answer so that I may assist you further. If this answers your question, please rate my performance between OK and Excellent so that I may receive credit for my work. Thanks for your business.

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Customer reply replied 4 years ago


The gains , what can I write off ?

The gain is calculated by taking the total sales price less the purchase price of the investment property and any improvements or additions from the property (the cost basis). You can deduct any money you spent improving or maintaining the property that wasn't otherwise deducted (for example, almost any expense incurred and paid on the property could be included in the cost basis if the expense was not also deducted as a rental or business expenses).

Let me know if this helps.
Phillip B, EA
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 704
Experience: Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.
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Phillip B, EA
Phillip B, EA
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