Capital Gains Question
Hello, I was wondering if someone could clarify this for me?? If I was to partner with someone, buy a house and the partner live in the house for 2 years, can I avoid capital gains tax when we sell.. Does it matter on %..??
Thanks Strat.
Assuming that both you and your "partner" are named on the title:
No, you can not avoid capital gains on your share of the sale profits. In this scenario, you are an investor and your share of the property is investment property subject to capital gains tax treatment when it is sold. Of course, since this is investment property, you can take advantage of the tax deferral opportunity afforded by section 1031 of the tax code.
Your partner, who meets the two year ownership and occupancy tests, can exclude up to $250K of his portion of the profits from capital gains taxes.[ Edited by DaveT on Date 11/03/2003 ]