Message Font: Serif | Sans-Serif
No. of Recommendations: 12
What is the best way to avoid capital gains tax on the 65K?

Hop into your handy dandy time machine. Set the date for December 2007. When you arrive, smack yourself upside the head and tell your historical self that you need to do tax planning BEFORE the sale closes. Because if you wait until after the sale it's too late and you can't do anything to avoid or reduce the taxes. Suggest to your 2007 self that you consider a 1031 exchange, and remind your 2007 self that an exchange needs to be put in place before the sale closes.

And while you're doing that time travel, go back and grab copies of any receipts and cancelled checks for improvements you made to the property. Those add to your cost basis and will reduce your gain.

Now, welcome back to the present. I see your time travels were not as successful as we had hoped. So the best you can do at this point is to document all of the improvements to the property that you can.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.