Quote:
Originally Posted by look 171
No tax for only 500k if married. 250k if single. Scott, do a 1031 exchange and buy a mansion with a barn to park all your toys.
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Get on the same page RIGHT NOW with all of your siblings.
California hates it when you trade a California property for an out of state property. As a matter of fact, the CA legislature has enacted a statute that requires you to file an addendum to your taxes EVERY YEAR stipulating that you still own the property, FOR THE REST OF YOUR LIFE. If you fail to file the tax addendum, then a state tax on the gain becomes due immediately. So essentially, if you "leave" CA, CA will haunt you for the rest of your life (and your heirs) waiting to get their tax. As far as I know, CA is the only state that does this.
I just traded a CA 4 plex for a 38 unit in Cincinnati. You will need to hire a 1031 exchange intermediary to facilitate the transaction. It will cost you less than $800 (its a flat fee).
My monthly gross on this particular exchange went from $3,800 (CA) to a little over $15,000 (Ohio). After the property is rehab'd I will push that gross to $17,100 (with no section 8). My point is, if you don't mind working a little bit (property management), you can trade your CA appreciation play for a cash flow play very easily by moving from CA to any number of Midwest cities, such as Cincy, Akron, Toledo, Columbus, Indianapolis, Memphis, Kansas City, or even Milwaukee.
As others have mentioned before me, you and your brother (and other siblings) need to owner occupy each of those properties immediately for 24 months and then sell them off, one by one.
Otherwise, you will be in the landlording business for the rest of your life. and that's definitely not for everybody...