| Author |
Message |
Fred (Iluv4res)
Junior Member
Username: Iluv4res
Post Number: 126
Registered: 8-2002
| | Posted on Tuesday, September 24, 2002 - 11:07 am: | |
I think the question regarding the stock vs. real estate also depends upon if you are an 'active participant' and if it's your primary business activity. If they are both simply investments without the RE being your primary business, then yes, you can offset it.
The 1031 exchange is to defer taxes, not eliminate them. It must be like-kind exchanges, but can be apartment building for a house as long as they are both investments. The IRS code has some strange limitations such as sexes of livestock, etc. There are rules, however, such as identifying the replacement property within 45 days and closing within 180 days or the filing of your tax return, whichever occurs first. Also, a qualified intermediary must be used, you may not take possession of the funds (nor can your attorney or any related party).
If it's your primary residence, you can sell with no capital gains (up to $250k single, $500k married filing jointly) if you have lived there at least 2 out of the most recent 5 years as your primary residence. |
Martin (Miami348ts)
Advanced Member
Username: Miami348ts
Post Number: 2833
Registered: 5-2001
| | Posted on Thursday, September 19, 2002 - 4:56 am: | |
Art is right. (as always)
The 1031 exchange though only works for "like-kind"-exchanges. Car for a Car but not a car for a truck, or your real estate for a car or something like that.
Further yes, your income of the sale of the vehicle is considered taxable income. Like some people buy out their leases at the end of the term for less money than the car is truely worth. If you turn around and sell the car for more your income from that sale will be taxable income.
BTW if you find enough widows and do this more frequently you will have to get a dealer license. and against most popular believe, their is NO amount of cars attached to that per years that you can "deal" without a license.
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arthur chambers (Art355)
Member
Username: Art355
Post Number: 669
Registered: 6-2001
| | Posted on Wednesday, September 18, 2002 - 6:00 pm: | |
Arlie:
If you did that you would be subject to the tax. However if you complied with section 1031 of the Internal Revenue Code, you would have made a tax free exchange. It all goes to show that if you know what you are doing you can avoid all taxes in most situations.
Art |
djmonk (Davem)
Junior Member
Username: Davem
Post Number: 94
Registered: 1-2002
| | Posted on Wednesday, September 18, 2002 - 4:33 pm: | |
Arlie Cars are generally not considered investment's. If you purchased this as your personal vehicle an not under a biz i doubt anyone would question capital gains being due. However if you want to pay it im sure they would be happy to take it. |
djmonk (Davem)
Junior Member
Username: Davem
Post Number: 93
Registered: 1-2002
| | Posted on Wednesday, September 18, 2002 - 4:20 pm: | |
Yes it can. I sold a 2-family last year an offset some gains from stock losses |
Horsefly (Arlie)
Junior Member
Username: Arlie
Post Number: 237
Registered: 5-2002
| | Posted on Wednesday, September 18, 2002 - 4:08 pm: | |
Here's another capital gains type question that I have always wondered about. Let's say that you find some dead guy's widow who still has his 308 Ferrari in the garage. You offer her $5000, she accepts the offer and you drive away happy. A few months later, you trade the 308 in on a new ride and the dealer allows you $20,000 on the trade in. So, in effect, you have MADE $15,000 profit on the car, even though it is on paper. Does the IRS consider this a taxable profit? Is it an actual capital gain? Always wondered about that sort of thing. |
Martin (Miami348ts)
Advanced Member
Username: Miami348ts
Post Number: 2823
Registered: 5-2001
| | Posted on Wednesday, September 18, 2002 - 3:06 pm: | |
I guess if it happened in the same year it could.
Have a tax consultant look into this.
Post the result please. Interesting question. |
Dave (Maranelloman)
Member
Username: Maranelloman
Post Number: 395
Registered: 1-2002
| | Posted on Wednesday, September 18, 2002 - 10:30 am: | |
Yes. I believe this is true. |
James H. (Jamesh)
Junior Member
Username: Jamesh
Post Number: 149
Registered: 5-2001
| | Posted on Wednesday, September 18, 2002 - 10:01 am: | |
Sorry this is not a Ferrari Topic.
Does anyone know if this is true.
I was told the capital gain from the sale of real estate can be offset by the losses in the sale of stocks. |