I'm scheduled to put my condo up for sell, however I'm having reservations. I owe $91K on my condo in Las Vegas premium locations, with an ideal price tag offer of $128K. History showed the last unit sold in 6 days cash buyer same price range. I was informed closing is in the neighborhood of $11K so my walk away would be $25-26K. My questions I present here today are to sell, rent to a family member; or refinance at this time?
What tax obligations would I be looking at on $25K, and what suggestions do you have for investing these funds to lower my tax penalty?
Living in Las Vegas for 22 years, personally, I would hold on to it and rent it. Your walk-away money is not significant enough to do anything with in terms of reinvesting other than put you right back where you are, and it will cost yiu, according to your post, 11,000 to get it. If you do sell, if you use the 1031 exchange process, there will be no tax on the gain. Depending on your tax situation overall, there may be no tax anyway, but you need to talk to your tax professional about that. My best guidance is to hold it and rent it for another 5-8 years and revisit thus then.
I am with @Charlie Fitzgerald - everyone's situation is different depending on depreciation, etc.. Definitely worth a phone call to your CPA before pulling the trigger so that you know. Also - I noticed that you said "my" condo - if you were the person living in the condo as your primary residence, you may not even have tax obligations. I (and your CPA) would need more information to go on.
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