Real Estate/Income Tax Question

[fs5]

Say if Couple A own a home and another property that they rent out. If they sell the other property they will get taxed correct?

What if they sell the other property and purchase another property of higher value? Will they still get taxed?

What if they sell the other property and purchase another property (higher or lesser value) with another person (say their son)?

Will they be taxed in both situations?

 

[Argo]

I think there's actually a law saying that you don't get taxed if you buy a house of higher value. Contact your realtor for more info.

 

[fs5]

edited: It was supposed to be "Will they still get taxed?" instead of "Why they..." sorry

 

[KingNothing]

You know, there's a tax thread stickied at the top of OT.

 

[fs5]

Originally posted by: KingNothing
You know, there's a tax thread stickied at the top of OT.

yes I know, but I figured that thread was for people doing their tax returns. Besides, a real estate person could answer this one also.

 

[CPA]

If they do a like-kind exchange, as in your example, they can generally defer their tax.

Unfortunately, I'm not sure about your last question. That may be something you want to call the IRS about.

 

[Carbo]

The Tax Man can answer your questions.

 

[richardycc]

as long as one of them live in the house they sold 2 yrs out of the last 5yrs, and they use the money to buy another house, they dont get tax on the profit. anything more complicated than that, ask your tax lawyer.

 

[Ameesh]

You can do a 1031 exchange to avoid taxes. my dad has done this without problems.

 

[wayliff]

Sale of Business Property

www.irs.gov and look for Pub 544
or
http://www.irs.gov/pub/irs-pdf/p544.pdf


Sale of your Personal Residence

www.irs.gov and look for Pub 523
or
http://www.irs.gov/pub/irs-pdf/p523.pdf