loan to lower gain taxes

[Eva Fox]

Hello to all

Please if someone can give  advice .

If after 11 years of renting I would ;

1. move back to property

2. take maximum possible reverse mortgage loan, or any another loan, using property

as corrateral and keep it

3. sell

4. pay back the loan

How all this above would impact the amount, subject to gain taxes, if at all ?

thak you e

[Joe Splitrock]

Originally posted by @Eva Fox:

Hello to all

Please if someone can give  advice .

If after 11 years of renting I would ;

1. move back to property

2. take maximum possible reverse mortgage loan, or any another loan, using property

as corrateral and keep it

3. sell

4. pay back the loan

How all this above would impact the amount, subject to gain taxes, if at all ?

thak you e

You will be taxed on the capital gains from the sale. There will be minor reduction for the time you occupy as a personal residence. You will also be taxed on depreciation recapture. The reverse mortgage or loan may not even be deductible interest expense. That may just be considered a personal loan, unless the funds are used to acquire another investment property. In that case, the interest would be deductible against the new property, not the property you are taking the loan against. 

Sorry the only way to avoid taxes is holding the property until you die. You can exchange it into another property, but once you sell, all the gain and depreciation is taxable from the property you exchanged out of.