Taxes When Selling an Investment Property

Real Estate Investing Real Estate Law
1

I need to buy a new home for myself and my handycapped mother - need to take her in.
To do so I need to sell my investment property.

Is there any way to avoid paying huge capital gains taxes?

Option 1: Do I still have to pay capital gain taxes if I first refinance the rental property and sell it later down the road?

Option 2: In case I go for 1031 exchange - when is the earliest I can convert my new investment property into a personal residence?

Option 3: I refinance, and will use funds to buy my new home, then will do 1031 exchange

Option 4 Refinance, then quite claim the property into my living trust? Then 1031 - whatever

Option 5: Refinance, quit claim to my son, he will sell

Any advice will be greatly appreciated

2

You don’t have to sell it. If I was in that position, I would use the equity in the house to put down for the second one, and then rent out the first house. Not only you would have cashflow from the rental, also you don’t have to worry about the taxes on the capital gain. Just watch for the numbers so you don’t go to negative cashflow. Good luck.