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Q: Capital gains taxes ( No Answer,   5 Comments )
Subject: Capital gains taxes
Category: Business and Money > Accounting
Asked by: roofian-ga
List Price: $5.00
Posted: 13 May 2006 21:57 PDT
Expires: 12 Jun 2006 21:57 PDT
Question ID: 728604
I own a piece of real estate with a mortgage of about $425,000.  I do
not have any write offs on it so... if I sold it, I would be subject
to full capital gains taxes.  My question is this:
I have an interested buyer that would like to purchase the property
for the same amount ($425,000).  I would be happy to just unload it
and get rid of the mortgage payment however, I do not want to pay any
capital gains taxes.  Is there any legal way to transfer the property
to the prospective buyer and avoid paying capital gains?  I have heard
of quit claim deed, grant deed, warranty deed, deed transfer...but I
don't know...
Thank you

Request for Question Clarification by richard-ga on 14 May 2006 18:45 PDT
What did you pay for the property when you bought it - - how much cash
and how much borrowed money?

Clarification of Question by roofian-ga on 15 May 2006 08:12 PDT
Thanks for the response.

When I bought the property, I gave the owner a 10% down payment
($26,000).  He financed the rest:  15 years at 8% on $234,000.

Got a bank loan about 5 years later to finance construction.  Paid
original owner off and improved property (see additions to my

Thank you

Clarification of Question by roofian-ga on 18 May 2006 10:55 PDT
guess too complicated...
There is no answer at this time.

Subject: Re: Capital gains taxes
From: markvmd-ga on 14 May 2006 08:08 PDT
How much did you buy it for?
Subject: Re: Capital gains taxes
From: roofian-ga on 14 May 2006 11:47 PDT
It's kind of complex.  In a nutshell:
Split up one large parcel into four.  Bought large parcel about 10
years ago for $260,000.  Made some improvements (buildings, etc.) that
contributed to appreciation of property.

After split, sold one of the parcels for about $400,000.  Used up all
my write offs (building costs, etc.) on the first parcel sale.

Now I'm in the situation described in my question. Basically want to
unload the other parcel (w/o capital gains if legally possible), and
own the other two mortgage free.

Any help would be appreciated.
Subject: Re: Capital gains taxes
From: roofian-ga on 18 May 2006 10:56 PDT
guess too complicated...
Subject: Re: Capital gains taxes
From: markvmd-ga on 18 May 2006 18:44 PDT
Too complicated, not enough information, and certainly not a five
dollar question. You need a tax attorney to advise you on how to
structure any future sale, and should have consulted with one before
the first sale so as to minimize the future tax bite.

A good one will run about $400 per hour. A bad one is cheaper but will
eat more hours and still not get you the best setup.
Subject: Re: Capital gains taxes
From: roofian-ga on 18 May 2006 20:59 PDT
Thanks for the response.  Thought someone might know a simple
solution.  But guess tax attorney is the way to go...

Appreciate your time.

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