Probable delay in the tax filing season
- Thursday, 04 December 2014 17:15
Here’s a heads up from what the national association of tax preparers feels. “Thanks to Congress who had all year to reinstate the tax provisions that expired last December 31 but never found the time to work out a deal we will most likely be looking at a tax filing season shortened since the IRS will not have enough time to program and test its computers. As in several previous years, the filing season won’t open for many in mid-Jan.”
1031 Exchange of Commercial Rental Property
- Saturday, 15 November 2014 06:32
I just had a client come in to see me that owned a commercial rental property that he no longer wanted. Researching his tax basis we determined that he will have a $150,000 capital gain on sale. Instead of selling the property his realtor has suggested that he do a 1031 like-kind exchange for a residential rental property to defer the gain. The realtor further suggests that he should only rent it out for a year or so, then move in and treat it as a personal residence. By doing this the realtor insists that the deferred gain of $150,000 on the 1031 like-kind exchange would be excluded under Code Section 121 (non taxable gain on personal residence) as long as the client lives in the residence for two years.
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