Tax Question - Florida Condo

[Frank DiGiorgio]

Hi All,

I recently sold a single family home in Orlando - Bought for $378k,  Financed $275k invested $100k, sold for $640k just over a year later.   Within one week I bought a condo for $275 in Tampa and paid cash.   

I was told I couldn't utilize a 1031 exchange because the second property had a lower value than the first, so I didn't bother with a 3rd party 1031 holding company.   Is there anything I can do at this point to lessen the tax burden for my profits on the Orlando home? 

Any help would be appreciated!  

[Dave Foster]

@Frank DiGiorgio, The 1031 was an option for you.  But  the rule to defer all tax is to purchase at least as much as your net sale or pay tax on the difference.  In your case the difference between sale and purchase price was so large you would have had no tax savings.  You could have purchased multiple replacements to get to that amount.  But that's all water under the bridge at this point.  Your gain was recognized with your sale.  The only option at this point directly related to the sale would  have been to invest in an Opportunity zone or fund.  For these you only have to reinvest the gain.  Your proceeds would have worked for that.  

Even though you have already purchased the new property you could invest in the OZ within 180 days of your sale.  As long as you have the cash to do that you could still save some tax.