Sold a rental for major profit, then bought other rentals with money.

[Joe Minteer]

So I finally sold a home and made a considerable amount of money.  I took the money, though not all of it, and bought a number of new properties.  How do you go about handing taxes with this type of situation?  What kind of tax expert should I search out?  

Thanks.

[Natalie Kolodij]

Unfortunately it's too late to utilize a 1031 exchange, which would have allowed you to potentially do this without paying any tax. 

You should work with a real estate specialized tax professional to see if there are optinos to reduce tax owed now. 

Potentially genreating losses on the new rentals acquired (if it was during the same year) can reduce your gain on the sale. 

As-Is your gain = (Sale price- closing costs) - (original purchase price + renovations+closing costs- Accumulated depreciation) And that will be taxed as capital gains (rates vary depending on your bracket) 

And the amount of that gain = the accumulated depreciation will be taxed at your ordinary tax rate up to 25%