Question on 1031 replacement property sale

[Lindsey Milam]

Hi ya'll!

Is there a calculator to determine the final capital gains taxes I would pay on the sale of a replacement 1031 exchange property? I'm struggling to decide if we should sell our STR. Profits average $30K/year.

Original purchase price: $270,000

Bought out business partner with new value at $300,000

Sale price: $414,000

(1031 exchange) New condo purchase price: $675,000

Sale of boat slip and garage attached to condo: $100,000

Sale price of condo: $1M

Thanks!

Lindsey

[Dave Foster]

@Lindsay Op de Coul, Of course if you do a full 1031 you'll pay no tax.  I'm a little fuzzy on what's being sold and what's being purchased.  But as long as you purchase at least as much as your net sale and use all of the proceeds from the sale in your purchase you will defer all tax in the 1031.

There's several ways to arrive at your potential tax liability - some more accurate and some more hand grenade mathish.  Calculating your basis. is the start.  Then adjusting that for depreciation and capitalized improvements.  If this property was the replacement in a prior 1031 then your starting basis would have been carried over from the property you sold to start the 1031.  We do have a calculator you can use.  And you can set up a call with one of our folks who specializes in helping investors calculate potential tax liability in general terms.  But your accountant and your tax return are going  be the most accurate source for this info.