Taxes. Making Money off Selling My investment Homes

[Cameron Riley]

- I am looking to sell my 2 houses, both my

Investment homes of over 4 years now.

- when I sell them, I will have technically “ made” money. Bought for 20k 4 years ago. Selling for 80k each.

- What taxes will I have to file?

- How can I avoid tax? Just re-invest?

[Basit Siddiqi]

@Cameron Riley

You already got some good advice about doing a 1031 exchange. This will allow you to defer the payment of tax. It is a good idea if you plan to continue being in real estate.

Pennsylvania does not recognize 1031 exchanges. You will at the very least defer it at the federal level.

Without the 1031 exchange - you are looking at paying taxes on depreciation recapture and the appreciation.
Depreciation recapture likely won't be a lot since your taxable basis was low.