Business paid off mortgage early TP carried via land contract. Now TP has current large Cap Gain tax for 2015. Any tax strategies before year end to reduce the Cap Gains? Business is Motel. Payment already received by TP since Aug. I don't specialize in section 1031's but I guessing this situation will not qualify. Any suggestions would be helpful.
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1031 would only apply if he purchased a like property through use of the exchange rules. He should have had the escrow company withhold taxes at the time of the sale. I have no suggestions on how he can now defer the cap gains tax.Believe nothing you have not personally researched and verified. -
It's not reducing capital gains, but try to shift as many deductions as possible into 2015 to offset the higher than normal income. One way to do that is to pay the anticipated state tax due with an estimated payment yet this year so you can claim it as a Schedule A deduction for 2015.Comment
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You are right about the 1031. That would have to have been done at the original time of sale. He elected to report gain on the installment method, so that ship has sailed long ago, as I am assuming he has been receiving payments for a while. Paying off the mortgage early doesn't change that.Last edited by Burke; 12-15-2015, 05:47 PM.Comment
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