Updated over 10 years ago on . Most recent reply
Help!!!!
I brought a house for $32,000 in cash. I put $10,000 in renovation. If I sell the house I know I can get at least $100,000. I was wondering is it best for me to sell the house and pay high capital gain taxes or take the equity out of the house to buy another house? Can you please give me some advice on what I should do?
Most Popular Reply
@Mark Elliott do you mind expanding on your strategy? You said you can pull cash out via a refi tax free and then immediately sell the property. I don't have a problem with the first part, but I believe you are implying that you can sell the property without a taxable gain which is not true.
Your gain will be the selling price (less costs to sell) minus your cost basis. Refinancing a property does not increase your cost basis, and will not help you when you sell.
What you can do (and what Trump does) is 10321 exchange into larger buildings to shelter your gains.