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I'm started a California IRS1031 and have 100K personal loan…

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I'm started a California...

I'm started a California IRS1031 and have 100K personal loan on property that was held many years for investment. I only made about $12K this year in Oregon. How much should I withhold as boot to pay for anticipated 2017 taxes?

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Submitted: 8 months ago.Category: Tax
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Answered in 7 minutes by:
9/26/2017
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 8 months ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,441
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Hi - My name's Lane

...

The amount that you should withhold to pay taxes on the boot (gain NOT able to be deferred) depending on the purchase price of the replacement property AND how much mortgage you have on the new property.

...

There are two types of boot: Cash boot and Mortgage boot.

...

Cash boot happens when you replace a property that is purchased for LESS than the sales price of the property given up. You must "buy-up" to escape cash boot.

...

Mortgage boot happens when you have less mortgage on the new property than the old property.

...

Let's say that you sold a property for 100,000 with a 50,000 loan on it. If you purchase the replacement property for 101,000 and have a mortgage of 51,000, there will be no boot.

...

But if the new property is 90,000 and you'll have 10,000 of cash boot (recognized gain).

...

And if you purchase the new property with say 45,000 of mortgage, then you'll have 5,000 of mortgage boot.

...

Boot is recognized capital gain not able to be deferred in the sale.

...

Long-term gains and qualified dividends taxed at

  • 0% if taxable income falls in the 10% or 15% marginal tax brackets
  • 15% if taxable income falls in the 25%, 28%, 33%, or 35% marginal tax brackets
  • 20% if taxable income falls in the 39.6% marginal tax bracket
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