The more it sits in my mind, the short term capital gain tax would be brutal unless you did a 1031 as part of it. Even then finding something to put the profit into would be my biggest problem.
Jul 13, 2016 09:04 AM
The more it sits in my mind, the short term capital gain tax would be brutal unless you did a 1031 as part of it. Even then finding something to put the profit into would be my biggest problem.
This would be taxed as self employed income, capital gains typically are for holdings of one year or greater.
Owner still owns it (trustee controlled), but can pay off the loan with proceeds from a sale. (Yes, there are legal issues here as far as controlling authority).
Not necessarily "end up"...many situations can be and have been cured.
This is a curious situation, something like this could be resolved without bringing another outside investor or buyer...I would believe (without knowing the total facts). Speaking as someone who understands investing and default situations (even though a death clause triggered this).