Legal Question in Real Estate Law in California
I'm selling investment property for 500k, I bought for 250k and the cost basis is 250k and there is no debt, if I do a 1031 exchange and buy a property that's 300k, do I pay capital gains taxes on the 200k boot money, or nothing, since my cost basis on the previous property is 250k
Asked on 5/10/17, 12:32 pm
1 Answer from Attorneys
You pay capital gains "boot" tax on any net cash you receive. The basis transfers to the new property. That's why there is usually no real point in doing a 1031 exchange into a property that costs less than the property you are selling.
Answered on 5/10/17, 12:49 pm
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