My brother and I were gifted a house in CA on 12/2013. An appraisal was done and taxes paid. I live in this house, and we rent part. The house will go on the market later this year, and the proceeds split. Because its rented, do the proceeds need to be used to buy another rental home, or can they be used for a standard home and land?
Thanks
Steve
Answer
It doesn't HAVE to be used for anything in particular, but the tax treatment will be different depending on what you do with the proceeds of the sale. Most likely there will be some capital gains tax if you do not do a 1031 exchange into another rental property. It is possible, however, that there is some way to avoid that. A good tax accountant will be more help to you than a lawyer on this issue.
No comments:
Post a Comment