Capital Gains/Income tax

[Brian Schmidt]

To the CPA's and tax professionals out there,

A scenario popped in my head. Say I sold a currently owned house with 100k in profit and then used that profit to invest in 2 other properties (50k each). Would the 100k I made from the sale by taxed or no since I invested it into other things? I would imagine a HELOC would be a smarter method but I was just curious about this scenario.

Thanks in advance! 

[Ashish Acharya]

Originally posted by @Brian Schmidt:

To the CPA's and tax professionals out there,

A scenario popped in my head. Say I sold a currently owned house with 100k in profit and then used that profit to invest in 2 other properties (50k each). Would the 100k I made from the sale by taxed or no since I invested it into other things? I would imagine a HELOC would be a smarter method but I was just curious about this scenario.

Thanks in advance! 

 No matter what you do with the gain, it will be subject to tax. Reinvestment does not avoid tax. 

Yes, if you take out loan against the equity, you get tax free cash and you can also deduct the interest if used to invest in other properties.