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There's ways around that through 1031 exchange but yea, only first 250k come home free. my argument still stands though that comparing HELOC to borrowing agains
by bdangubic 2y ago
There's ways around that through 1031 exchange but yea, only first 250k come home free. my argument still stands though that comparing HELOC to borrowing against stock is a poor analogy
- pwg 2y ago> There's ways around that through 1031 exchange Only if the properties are both used for "trade, business or investment" (https://en.wikipedia.org/wiki/Internal_Revenue_Code_section_1031 https://en.wikipedia.org/wiki/Internal_Revenue_Code_section_...). Since your primary residence is not classified as "investment" by the IRS, you can't use a 1031 exchange to defer gains on your primary residence. And a 1031 is a deferral (see cite above), not a "tax free" swap. If you eventually sell without going through yet another 1031 exchange, all the deferred gains become taxable at that point.
- bdangubic 2y ago> you can't use a 1031 exchange to defer gains on your primary residence who says it would be my primary residence when I am about to sell... you never sell your primary residence unless it is an emergency, you move first and make it an investment property and then sell and roll over ... > If you eventually sell without going through yet another 1031 exchange You don't of course ever do that. And all this should be in a trust of course...