Aug
21
how to avoid 40% tax on property sale?
By
we’re selling a piece of commercial property for a large chunk of change, and moving our business elsewhere. the govt. is going to take 40%, leaving a very small chunk of change, and we’ll be unable to replace our business for what we sold it for. what can we do? how can uncle sam rob us blind like that? is there a way to get the rate lowered?
Quick Property Sale
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2 Comments
July 7th, 2009 at 11:40 pm
You need to talk to your realestate agent and your accountant. There is a program that protects you from this tax. If you buy the new property within 2 years of the sale of the old property, you pay Capitol Gains Tax. It’s called Property Exchange and you only pay 25% capitol gains on the balance from one property to the other. Example: you sell for 50,000 and buy for 40,000, you pay capitol gains tax on 10,000.
Good Luck!
July 8th, 2009 at 2:04 am
I would consider doing a Tax Deffered Exchange IRC 1031 and move your equity into other real estate. This would defer your gains. Do not forget the Franchise Tax Board will also take 3% and this can be avoided with the exchange.
There are many out there that can assist, real estate attorney’s Brokers and our exchange companies.
It is always very important to consider the tax aspects prior to selling.