Follow-up
Sorry for the delay in responding. We got really busy.
Gene V is right on the money.
The taxpayer traded down in value by $20K and increased his mortgage by $40K and netted $60K in his/her pocket at the end of the day. This example ignores any depreciation recaputure issues or closing costs.
Bottom line:
$85,000 recognized gain
$60,000 realized gain
$25,000 deferred gain
Sorry for the delay in responding. We got really busy.
Gene V is right on the money.
The taxpayer traded down in value by $20K and increased his mortgage by $40K and netted $60K in his/her pocket at the end of the day. This example ignores any depreciation recaputure issues or closing costs.
Bottom line:
$85,000 recognized gain
$60,000 realized gain
$25,000 deferred gain
Comment