Tax reform outcome - should it affect sell decision Sacramento
I have been thinking of selling a rental duplex in Sacramento. Owned since 1999. Market is strong for seller, almost 0 inventory in area for a few weeks. One tenant is moving out in June, the other is staying. My rent is below market, so I can bring it up to $1400 each side. That would provide 1200 cash after all expenses, including maintenance. I have 150K mortgage. Sell price 525K. May have 250K cap gain and dreaded depreciation recapture.
I do not want to do 1031 exchange. I want to divest away from day2day rental involvement. Don't like DST, TIC... too much management fees, tie up $ too long. My plan was to take the cap gain tax hit and move harvest the equity to more liquid equity investments such as diversified index and low fee market funds.
One of the counterpoint to selling is rent in Sacramento can continue to go up while my mortgage is fixed. However, the sell price is looking attractive. I don't know if we are in bubble territory but it is ripe. The San Francisco Bay Area is cooling.
With Trump's tax reform on the table, how do you think it may affect my sell decision wrt Cap Gain tax changes?
It may or may not pass and it may or may not happen in 2017. Any suggestions?