| R/E-capital gains question |
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jstalin
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| R/E-capital gains question |
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Hello,
My parents are giving me a severed lot so I can build a house on. I plan on building it this spring and have no intentions of living in it, this is strictly an investment.
My question is, do I have to wait a year before selling to avoid paying capital gains on it? I understand if I buy a house and resell within a year, I would, but since this land has been owned by the family for many years, would this be an exception?
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Tue Oct 02, 2007 4:13 pm |
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coaster
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You have to intention to sell the property, correct? Have the property appraised just before you take possession of it. This becomes your cost basis, NOT what your parents paid for it. Thus you have no capital gain upon taking possession and won't have until you sell it.
~Tim~
Eye Candy : Why Whimsy
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Tue Oct 02, 2007 5:00 pm |
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pf101
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I'd talk to a tax expert about this. You'll have to deal with gift tax issues and potentially some other things so you want to make sure you do everything correctly.
Personal Finance 101
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Tue Oct 02, 2007 5:15 pm |
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coaster
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That's good advice. People who rely on message boards for tax advice are relying on opinion, not fact. 
~Tim~
Eye Candy : Why Whimsy
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Tue Oct 02, 2007 5:33 pm |
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jstalin
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quote:
Originally posted by coaster
You have to intention to sell the property, correct? Have the property appraised just before you take possession of it. This becomes your cost basis, NOT what your parents paid for it. Thus you have no capital gain upon taking possession and won't have until you sell it.
My parents are severing a few acres of land they're currently living on. I plan on building on the newly severed lot this spring and then selling it, I have no intention of living there. Does this exclude me from capital gains tax?
Oh yeah, there's no gift tax in Canada so I'm safe from that
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Tue Oct 02, 2007 5:59 pm |
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pf101
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Ah...Canada. I know zippy about Canadian taxes, but in the US, pretty much nothing excludes you from CG taxes. I still vote to talk to a pro. When it comes to taxes you just don't want to mess around.
Personal Finance 101
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Tue Oct 02, 2007 6:03 pm |
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coaster
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Sorry ... didn't know it was Canada. Disregard my previous comment.  I love Canada and Canadians but know nothing about their tax laws (other than they soaked me for national sales tax whenever I've spent any money.)
~Tim~
Eye Candy : Why Whimsy
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Tue Oct 02, 2007 8:21 pm |
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jstalin
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thanks anyways, Ill check with a pro closer to the build date but if anyone else knows anything, please feel free to chime in
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Wed Oct 03, 2007 3:45 pm |
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