 |
6-48328fe7f656 |
| |
 |
We have a second home in Utah that we use 2 weeks a year and rent it out during ski season. The balance of the mortgage is $280K. Our primary residence is in Hawaii. To buy our Utah house we took out a home equity loan. We also incurred credit card debt to furnish the house. Last year we refinanced our Hawaii home to combine the debt from the second and credit card. Our Hawaii mortgage is now 620K. We wanted to sell the Utah home but found out about the capital gains on a second home. It is not possible for us to live there for 2-years. We have friends who want to give us half of the market value of the cabin in Utah (350K) and be partners. We want to use the money to pay down our Hawaii mortgage. We have several questions about this. How will we be taxed on the $350K? Our friend wants to turn it into a corporation to protect us both. Is it better to do that after he becomes a part owner? Would the 1031 rule work to buy another home with a partner?
|
| |
| |
 |
I don't know how much profit you'd have when you sold, either the whole place or half of it, but it sounds as if your profit will be subject to long-term capital gains taxes. As for Section 1031 -- that's complicated and you should get your information from a lawyer or CPA who is experienced in such transactions. And your corporation question should be taken to your own lawyer. |
| |
|
Edith
Originally published on May 20, 2008 |
| |
| |
|
Back to Summary
|
< Previous | Next > |
| |
|
|
