Saving Advice Forums  

Go Back   Saving Advice Forums > Financial Chit Chat > Investing & Banking

Investing & Banking Stocks, bonds, banking interest rates, CDs and all other investment vehicles you want to talk about.

LinkBack Thread Tools
  #1 (permalink)  
Old 12-06-2006, 08:58 AM
Join Date: Jul 2006
Forum Posts: 308
Default How to reduce taxes paid for gains from assets? Assets like RealEstate,apartment...

I know millionaires know ways of avoiding taxes legally. Can you help me out? Thank you for your knowledge.
Reply With Quote
  #2 (permalink)  
Old 12-06-2006, 10:14 AM
$ Saving Sixth Grader
Join Date: Dec 2006
Location: Washington, DC
Forum Posts: 61
Default Re: How to reduce taxes paid for gains from assets? Assets like RealEstate,apartment

Look into what's termed a 1031 (or tax free) exchange. You can sell real prop, purchase replacement real prop in a 90 day window and not pay any capital gains on the transaction. However, any "boot" coming out, that is, negative difference in asset price that will be returned to you as cash at the end of the transaction will be subject to capital gains tax. This section only applies to commercial real property, but there is a tax device for residential as well as I recall. Ask your accountant.

A quick note on tax avoidance:

Millionaires pay thousands of dollars to accountants and attorneys to construct elaborate transactions to reduce tax exposure. However, the cost of doing so is often close to 5-10K. So for a million dollar transaction that works out to .002-.01%, but for a transaction much smaller than that the fees don't change (the complexity is the same), so it comprises a much larger percentage of the asset value. So for a 100k property (non primary residence), it is not worth avoiding the capital gains tax on it (even if you purchased the property for $5,000.00). For primary residences there is a tax floor of (I think) 1million (I can't remember if it's absolute value or 1 mill in capital gain, hopefully someone else does). That is, if your primary residence is worth less than 1 million (again I think this is right but am not 100% sure) you do not pay cap gains on the increase in market value.
Reply With Quote
  #3 (permalink)  
Old 12-06-2006, 11:51 AM
magnate's Avatar
$ Saving Fourth Grader
Join Date: Dec 2006
Forum Posts: 25
Default Re: How to reduce taxes paid for gains from assets? Assets like RealEstate,apartment

The only way to reduce the taxes on the gain on real estate is to do a "Section 1031 Exchange". The only problem is that you do not receive cash. You received another piece of real estate.

There is not a way to reduce taxes on the sale of stocks at a gain.
Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Reduce Taxes With A Home Business jeffrey Taxes 10 08-11-2015 07:42 AM
Transferring Assets LuxLiving Investing & Banking 8 02-03-2007 07:29 AM
Jonesboro Atlanta Realestate 2007 Calendar shelbylovesmelby Computer / Office Freebies 0 10-15-2006 09:21 AM
What % of assets do you have in equities? disneysteve Investing & Banking 15 07-15-2006 11:25 PM
Found Assets amomof4 Frugal Questions and Answers 3 06-29-2005 02:59 PM

All times are GMT -7. The time now is 06:00 AM.

Powered by vBulletin®
Copyright ©2000 - 2018, Jelsoft Enterprises Ltd.
SEO by vBSEO 3.6.0 PL2 ©2011, Crawlability, Inc.