DO YOU STILL HAVE TO PAY TAX ON PROFIT OF SELLING AN INVESTMENT PROPERTY IF YOU CAN REINVEST 2 MONTHS AGAIN?

I paid for an investment skill during an auction as well as sole it inside of 3 months a little profit, however do i right away compensate taxation upon which distinction or can i equivocate it if i reinvest which same principle+profit in to an additional skill soon?

{ 6 comments… read them below or add one }

Diane A May 2, 2010 at 7:54 pm

Look at the rules for a “Starker exchange”-that is what fits your question.

the tax lady May 2, 2010 at 8:14 pm

If you have already sold the property, you can’t do a starker/1031 exchange. it’s too late.

You must declare the sale and pay any gains tax due.

Wayne Z May 2, 2010 at 8:41 pm

2 months = 2 days = 2 minutes = 2 seconds.

Regardless of what you do with the money, it is taxable.

Jss May 2, 2010 at 8:47 pm

No. You must report the sale on schedule D (Form 1040). The capital gains is taxable income.

chatsplas May 2, 2010 at 8:52 pm

YEP, have to pay capital gains taxes on property even if you rolled proceeds into another property. . . .
Have to do a Starker Exchange to avoid tax, at time of sale, set it up, too late after the fact
You don’t pay tax on PRINCIPAL, but on capital gains

tro May 2, 2010 at 9:51 pm

I don’t think this is a 1031 exchange
yes, you will pay on your profit, there is no provision about rolling the profit into another investment

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