Legal Question in Real Estate Law in California

Re: Capital Gains Tax

The money you receive usually must be reinvested in another home in order to avoid capital gains taxes.

Re: Capital Gains Tax

If the property you sold was a primary residence, you can normally take a $250,000 exemption from capital gains.

If it was a rental property, the funds must be reinvested in another property (not one you already own). Furthermore, you must follow the strict guidelines of IRC Section 1031. If you have already sold the property and collected the proceeds, you are too late. You will be required to pay the capital gains.

Re: Capital Gains Tax

The question cannot be answered properly without more details. Was the "property sold" your primary residence? Investment real estate? Securities? What is the nature of the property you would reinvest in? A new primary residence? Investment real estate? What is the nature of the proposed investment -- reduction of debt, or increase in equity (e.g., by buying out the interest of a tenant in common)?

Another factor is timing -- have you received the proceeds, even constructively, yet?

You may be able to redeploy the money without red tape, or with the 1031 exchange type red tape, or not at all, depending upon the facts and circumstances.

I think you should talk with a tax advisor, facts in hand, at once. This could be an attorney with some tax practice, but it could also be a non-lawyer tax planner. Most larger office of outfits like H&R Block will have at least one senior person around who is qualified to give planning advice of this sort.

Re: Capital Gains Tax

Your question is impossible to answer because you are not given enough information. Let's put it this way if the original equity came out of investment property and all the rules of a 1031 exchange can be met, then you can invest in another piece of investment property. Are you saying that you want to invest it by putting it into a piece of property that you now have. Like contributing to your own property or to yourself. You have to be kidding me. I still just don't understand your question.i have been practicing law in this speciality for over 30 years in the san francisco bay area and if you wish to consult with me you can contact me at 925-945-6000.