Just like the title says..
I'm selling a home that I inherited and will have to pay capital gains tax unless I reinvest it in more real estate. Is there any loophole that would allow me to purchase a new truck with the proceeds of the sale in which I can still avoid paying capital gains?
I think i know the answer before asking but figured this would be a good place to see if there was another option.
We've been renting it out since acquired and accountant says we need to reinvest in similar rental property within 180 days to avoid capital gains.
Thanks
Selling a home, can I purchase a new truck with proceeds to avoid capital gains?
Discussion in 'Trucker Taxes and Truck Financing' started by CruisingAlong, Mar 20, 2015.
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i don't see how a truck would be considered rental property.
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I don't either unless perhaps purchased and then leased to my own llc which makes payments on it? (thinking outloud... I'm not an accountant but I did stay in a holiday inn express last night)
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No disrespect intended Cruising but do you really want to invest in something
that goes down in value? Might want to get a second opinion from a tax pro. -
This is just a thought to consider if it's even a viable option. -
Depending on your tax bracket..probably your in 10 to 15 % bracket so your CG tax would be zero...Go find a new accountant please
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I don't know that you would need to pay capital gains on something that was inherited. At one time we had an exemption on inheritance tax of $600,000. I don't see why you would need to pay capital gains on something that was inherited. You need to talk with a good CPA or tax attorney and ask them. But, even if you could buy a truck with the proceeds, I don't think it would be a good idea. I would look for another way to purchase your truck.
Rather than selling your inheritance, you might consider getting a home equity loan or line of credit using the real estate as collateral. You can usually get a home equity loan at a reduced interest rate and when the loan is paid off you will still own the real estate which will probably be worth more at that point than it is today. There might even be some tax advantages to getting a home equity loan on the real estate instead of selling it. You could also look into getting a business line of credit using the house as collateral. As long as the loan is for business purposes it should be deductible. Your truck will be free and clear and loans on real estate are normally lower than on equipment.CruisingAlong, bigdogpile and Strider Thank this. -
Honestly if I were in your shoes, I would invest in a property somewhere you like. Your situation is kinda like hearing about drivers mortgaging their home to buy a truck, it is way to risky for what money is left in trucking. That land will be there waiting for you and your spouse when you get done playing truck driver. If you just have your mind set on getting a truck with the money, I will give you a realtors number to buy the adjoining acreage beside mine in northen Florida, then you can sell it to me for a loss and take a 06 Pete off my hands for twenty bucks.
UKJ, 123456 and CruisingAlong Thank this. -
One other thing, if you decide to get a home equity loan or business line of credit, you could continue renting the property out and let the tenants pay for the line of credit with their rental payments. There could be a number of tax benefits to keeping the property and getting a line of credit rather than selling it.
CruisingAlong Thanks this.
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