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JA: . How can we be of help? Customer: We, my wife

Customer Question
Hello, JA: Hi. How can we...
Hello,
JA: Hi. How can we be of help?
Customer: We, my wife and I, own a home that we purchased for 685,000. We have put
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: aprox. 200k into it and will sell it for 2.800,000. Can we somehow avoid this large capital gain or at least defer it?
JA: Is there anything else important you think the Accountant should know?
Customer: We have 2 adult children living with us for over 2 years. They are 25 and 27.
JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and then connect you two.
Submitted: 1 year ago.Category: Tax
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Answered in 12 minutes by:
5/17/2016
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 1 year ago
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4,781
Experience: 35 years tax experience, including four years at a Big 4 firm.
Verified
Hi from Just Answer. I'mCustomer I can assist. If it was your principal residence for the qualifying period, you can exclude $500,000 of your gain. That still leaves quite a bit to report, though. You might consider another option: convert the property to a rental, and do a 1031 tax deferred exchange. Properly done, you could qualify for both the nonrecognition under IRC 121 AND deferral under 1031. Your future plans will dictate how best to proceed. In order to defer, you will have to purchase a qualifying property of at least the deferred gain plus exclusion. If you plan to repurchase, you could defer up to all the tax. This strategy will be well worth the fee your tax pros will charge to put the transactions together. An exchange will require a qualified real estate intermediary and CPA or other tax pro. Thanks for asking at Just Answer. Positive feedback will rate my response as accepted and close out your request. I'mCustomer
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PDtax
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4,781
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Experience: 35 years tax experience, including four years at a Big 4 firm.

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