Originally Posted by Stormin_Norman
Originally Posted by Alamosa
Good thread. Great reading.
I have not yet seen Capital Gains Tax mentioned.
For those who have had their rentals value increase nicely over time it seems like there are only 2 options for selling 1) take a big tax hit, or 2) re-invest in a similar property.
Anyone here dealt with that issue?




Long term capitol gains is 15% federal, plus state. So that's probably around 22% of your profits for most people. Two possible ways you might deal with capitol gains on properties.

1. move into the property for 24 months withing 5 years of selling it.

2. Setup a self directed IRA and LLC to buy the properties. When you sell money stays in the IRA, taxes get deferred until you pull the money out at retirement, hopefully at a lower rate.

I'm not a tax professional, so don't listen to my advice and talk to tax professional.


I'm not an accountant either, but there's lots of things you can do beside a 1031 exchange to shelter gains from real estate.

I don't think a residence should be anyone's primary investment, but I don't know that its ever a bad deal unless you buy way more house than you can afford. So much of appreciation is based on an area's population and job growth, the higher those two things are the higher the appreciation. If you're in an area with flat or negative population growth you're probalby going to do about the inflation rate, which is basically a forced savings account when you consider you would still be paying principle, insurance, taxes and maintenance indirectly through a land lord if you rented. If you're in a faster growing area (say Atlanta, Austin or Houston and you bought 25 years ago) you're going to do better on a house than you probably would in a stock market or other passive investment, particularly if you plan to downsize on retirement and can tax the money tax free