Tax Strategies
First time L/O with a partner of mine. We want to go into REI and have a L/O as our first endeavor. We are buying house and lease-optioning. Should we both be on the mortgage, can we both claim interest on our taxes, what's the best way to handle the profits to reduce capital gains after the house is optioned? Thanks for any opinions!
If you hold the property as rental or investment property, you can do a 1031 exchange into your next investment property in order to defer your capital gain taxes.
If, however, you live in the property as your primary residence, and you can live in it for 24 months out of the most recent 60 months, and then sell the property, you can exclude up to $250K in capital gains if you are single and up to $500K if you are married under Section 121 of the Internal Revenue Code.
Just two thoughts.
[addsig]
boehnc,
"Should we both be on the mortgage, can we both claim interest on our taxes,"
Yes!!!...and yes, 50/50...interest, taxes and depreciation...
"what's the best way to handle the profits to reduce capital gains after the house is optioned? Thanks for any opinions!"
TheBestWay....see your accountant...
....as always,
GoodInvesting, Rocky