Capital gain saving / Cashing in

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Topic Author
bezosdezos
Posts: 4
Joined: Sun Jan 13, 2019 7:29 pm

Capital gain saving / Cashing in

Post by bezosdezos » Mon Jan 14, 2019 3:16 pm

Hello,

I own a rental property. If I sell this property it could generate approximately 300-350K in capital gains.
My family income is close 450K so there is good chance, I might get taxed 20% for capital gains.

I have two questions related this situation

Question 1 : Can I avoid capital gain and minimize my mortage interest
>> If I invest these 300K gains to pay-off portion of my primary mortgage, then it is considered same buying like for like property ?

e.g. Primary mortage is 4K per month for ~900K property which i bought 1 year back. So there is good amount of interest to be saved.

Question 2 : I dont want to buy more property so is there any other way to avoid gain tax ?

Note: I have portfolio of 400K outside these real estate assets ( 30% bond and 70% domestic stock )
So I dont think I need to use these gains for any immediate expenses / opportunities.

Just in dilemma of reducing interest vs betting more on house prices+rent to beat those interests. I am assuming 4.5% interest on both mortages.

Thanks,
Mandar.

Gill
Posts: 5575
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Capital gain saving / Cashing in

Post by Gill » Mon Jan 14, 2019 4:02 pm

If I understand your proposal correctly, there is no way to use the sale proceeds to avoid recognizing the gain for tax purposes. This is not a like kind exchange if that is what you're suggesting.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal

Topic Author
bezosdezos
Posts: 4
Joined: Sun Jan 13, 2019 7:29 pm

Re: Capital gain saving / Cashing in

Post by bezosdezos » Mon Jan 14, 2019 8:10 pm

That answers my question 1
Thanks.
I will have to buy another property or invest that in some tax saving style account or pay tax .

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