All Forum Posts by: Trevor Morris

 @Bill B. thank you for the information, this will help as we discuss further.

@Allan C. this property in question has never been a rental.  We purchased in 2017 as a joint venture vacation home (for all of us to utilize).  We sold our other small primary residence at the beginning of the pandemic March 2020 and moved into the vacation home 'temporarily' (here we are 4 years later) until we found our next primary home.  Once we move into the home we are renovating now though, we may consider renting this at that point.  

@Wayne Brooks Appreciate the input here, this would make the most sense to me as well.  I was just hoping there was an alternative for them instead of a large tax bill if we went down that route.  From my research I don't believe a 1031 Exchange is possible in this scenario either if they wanted to keep their gains in a 'like-kind' property, as we would not be able to pull the equity out on our side in this case.  

Anybody have a highly recommended CPA or other expert that I could connect and take a deeper dive on this with?  

New to BP forums and looking forward to start making connections!

I have a scenario that I am looking for some tax EXPERT guidance on what the rules are for capital gains on a co-owned property, and best way for this to play out.  

Currently we co-own a vacation property with my in-laws with which we have been using for our primary residence for 4 years.  We just bought a different house which needs significant renovation, but we should be done with it and moving into it by next summer.  The vacation property was purchased in 2017 for $500k and currently valued at $1.3mil.  In a scenario where we sell the property (for round numbers purposes not including fees and closing, I have rounded the numbers as is) the profit is $800k , because it has been our primary residence for the last 4 years, are we still sheltered from $500k in capital gains?  How does this work for the other co-owner of the property that does not live here as a primary residence?  Are we all subject to capital gains on just the $300k?  Any guidance on how this works would be great.

As a follow-up to this, once we move next year I would like to scale my portfolio very quickly. I am open to BRRRR, flips, STR, and small/large multifamily. Any advice on the best way to use this capital moving forward? We have discussed the option of selling to get the equity out of 'co-ownership' so that we can use the capital to pursue other opportunities. But the big capital gains questions linger here. We have also discussed keeping the property as a rental and just utilizing a HELOC to pursue other deals with the equity in it - there can be downsides to this too. Cash out refinance is an option as well, but it is not very appealing at this time (background here is $330k left on mortgage at 2.65% rate).

Any guidance or options to consider to any or all pieces of this would be appreciated!