Quote:
Originally posted by Wayne at Pelican Parts
Actually, no, it's a *very* unusual situation. This fellow is pretty smart actually. He inherited a house in an area that he didn't terribly like. That one was being rented out. So, he sold that one, and then shopped for a house to move his family into, finding the one that we're in right now. So, he did what is known as a 1031 exchange, and will be converting the rental property into a personal residence in 2 years when we move out. This saves a lot in capital gains taxes.
Very smart move if you ask me...
-Wayne
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Good lord who is giving you tax/investment advice?
1-Inherited property gets a step up to fair market value at the d.o.d. (or alternate date, but same idea).
2-See point 1.
3-Capital gains tax rates are the cheapest tax rates anybody is going to be paying for a very long time. Of course, thanks to point 1 this was presumably not an issue for your landlord.
Given the facts presented your landlord is an idiot. I suspect the facts are a bit more complicated as nobody would do a 1031 out of an inherited property if it had recently been inherited because there would be no gain.
Erik