Sell With No Tax

Expert, localized Los Angeles answers provided by Heather Roy

Sell With No Tax
	Question : Dear Ms. Lank: I purchased a villa in another state as a second home eight months ago. I never lived there. I am about to sell it for a profit. I have had this villa under one year and would like to know if I can reinvest the money on another home without paying any type of tax penalty?

	It sounds as if that place wasn't rented out, in which case I don't know of any way to avoid paying capital gains tax, at your ordinary rates, on the profit. If you wait to sell after one year, the gain will be long-term and the federal tax no more than 15 percent. If, on the other hand, you have used the villa as rental property, talk with a CPA or tax lawyer about the procedure known as a Section 1031 tax-deferred exchange.
	Edith Originally published on May 22, 2005

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