Hello everyone:
This my first post on this board. I’m hoping some of you can give some advice for an exit strategy.
I’ve owned a property for approximately 18 yrs. It’s located in a resort area and is not a rental property. I have used it for my personal use over the years, however, it is not my primary residence.
My question, if I were to sell this property, what would be the most effective method to minimize taxes?
Thanks for any suggestions.
sell it at a loss.
Up to $3000 in capital losses can be subtracted from your other income on your 1040.
If your goal is to minimize this year’s income taxes, then try to contain your net capital loss to just $3000.
why are you selling it?
if it’s a resort area, why don’t you rent it out for the appropriate seasons?
just curious.
good question, I don’t think selling it a loss is an option, that would make much sense. After 18 yrs I’m sure you made a lot of equity. Consult a tax consultant.
Gypsy,
Of course it may not make good business sense. But when the question is “what would be the most effective method to minimize taxes”, selling at a loss is the best possible answer.
My preferred answer would have been “don’t sell” without a compelling reason to sell. But, since we were asked to make selling the property a constraint, this answer is automatically eliminated.
If ESC really wants to sell and won’t take less than FMV to get the maximum potential profit, then the sale is a taxable event with a 15% tax rate. Under these conditions, there are no other options to minimize taxes on the sale profits.