For all you CPA's and tax advisors,
It used to be you had to hold on to a house for 2 years to avoid capital gains. What's the scoop in areas like AZ where the values are declining?
For example, a friend of mine bought a house last year before I met him for $225,000. He doesn't like the area and wants to move. Well, the CMA shows his house is only worth $190,000. What's the tax liability?
Your best advice would be greatly appreciated.
TIA.
Juli Vosmik
480-710-0739
It is always important to get our clients to their CPA to check on all aspects of their liabilities.
I'm not a CPA, but there shouldn't be a tax liability, there was no capital gains. Capital gains is only paid on profit and clearly there wasn't any. Also if it was an investment property, he may actually be able to help him pay less in taxes because he can use it as a loss.
Until your friend sells there has not been a taxable event.If they sold the home today for less money than they had purchased it for their would be no capital gains tax owed as ther would be no gain.
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