Comments on: Selling rental property. How can I avoid paying tax on this? Need a quick answer please?

By: Judy

Judy — Mon, 21 Jun 2010 06:15:27 +0000

No, you can’t pay off your personal residence with the money and avoid paying tax on the proceeds.

The other answers about the 1031 exchange being your only “out” are correct.

By: v b

v b — Sun, 20 Jun 2010 19:03:33 +0000

If you have already sold the property, it’s too late to set up a 1031 exchange. Even then, you’d have to invest in a more expensive property and not take out any money to avoid paying taxes now.

By: Ms.MojoRisin

Ms.MojoRisin — Thu, 17 Jun 2010 10:59:08 +0000

The only way to avoid capital gains tax on the sale is by doing a 1031 exchange, also known as a “like-kind” exchange. You would roll over the proceeds from your sale into another rental property.

Capital gains rates are at an all time low, so you picked a good time to sell.