DEAR BOB: A friend owns a vacation home at Lake of the Ozarks in Missouri. She said if she sells, she has 45 days to buy another piece of property, perhaps a condo in Florida, before she owes tax on her profit. Is this correct? –Sue E.
DEAR SUE: No. Your friend is mistaken. She should consult her tax adviser.
Purchase Bob Bruss reports online.
Unless she is selling a rental property, which can qualify for an Internal Revenue Code 1031 tax-deferred exchange, she will owe capital gain tax on her sale profit. There are no special tax breaks for the sale of a nonrental vacation property.
MUST A JUDGE APPROVAL PROPERTY PARTITION?
DEAR BOB: You often discuss partition lawsuits where one co-owner wants to sell but the other co-owner doesn’t. Does a judge have to grant permission for the partition lawsuit to force the sale of a property? If so, when one co-owner wants to buy out the other co-owner, might the judge deny a partition sale and allow the purchase by the co-owner? –Mark S.
DEAR MARK: A judge doesn’t have to grant a partition lawsuit brought by a property co-owner. But they usually do, even when a majority of the co-owners don’t want to sell.
Of course, a judge can grant a continuance for one co-owner to buy out another co-owner. Anything can happen in a trial court.
PROS AND CONS OF INVESTING IN COMMERCIAL REAL ESTATE
DEAR BOB: What are your views on investing in commercial real estate, compared to residential properties? I just read something about the ease of renting commercial properties where the leases last for many years, instead of a year for apartments and rental houses. Would commercial properties be too complicated for a new investor? –Karen C.
DEAR KAREN: I recommend rental houses because they are so easy to buy, finance, manage, and profitably resell. Having owned commercial and apartment properties, I find single-family rental-house investing to be easier and more profitable.
However, a contrary view is contained in the superb new book “Confessions of a Real Estate Entrepreneur” by James A. Randel, available in stock or by special order at local bookstores, public libraries, and www.Amazon.com.
The new Robert Bruss special report, “How to Sell Your House or Condo for Top Dollar in a Buyer’s Market,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
