Ravi Desai <ravster3[at]hotmail.com> wrote in message news:<tsG8d.16536$jj2.798627[at]news20.bellglobal.com> ...
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This was a 2 family house I was living in while renting the upstairs
apartment. I was getting income but at the same time I was able to
write off a lot of expenses. If I was living in the house for the last
2 years with no rental, then I would be exempt ( according to my tax
preparer). Since I sold the house for $430,000, half of it, or
$215,000, would be subject to capital gains since half of the house
was used as a rental/business. The other half was my residence.

In article <tsG8d.16536$jj2.798627[at]news20.bellglobal.com> , Ravi Desai
<ravster3[at]hotmail.com> wrote:

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In the US, if you deprecieate part of your home, such as a part
used for a rental or home office, then the capital gains exclusion
does not apply, even if you have lived in the home for 2 of the
past 5 years. You end up having to "recapture" the deprecieation
when you sell.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

If you have been LIVING in the house for 8 years, it would count as your
primary residence, and you would not have to pay capital gains taxes for
its sale(in Canada, at least). Another thing is that if you sell one
property and buy another(usually bigger/more expensive) property, you do
not have to pay capital gains taxes.

MikePier wrote:
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MikePier wrote:
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For every $1.00 you pay the bank in mortgage interest, you save maybe
$0.30 to $0.40 in federal and state taxes. So would you rather pay the
bank a dollar or the government 40 cents?

--
Richard McBane

In article <1deea291.0410050316.31aaff85[at]posting.google.com> , MikePier
<mikepier[at]optonline.net> wrote:

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I would suggest running the numbers. Perhaps you have a tax
program for your computer, and you can do a proposed return both
ways.

What I expect that you will find is paying it now is the best
way to go. The reason is that for each $1 of tax savings, you
have to pay $3 to $4 in mortgage interest. The capital gains
tax that you speak if is independent of anything else--it will
be there whether or not you take the mortgage interest deduction.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

MikePier <mikepier[at]optonline.net> wrote:

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Check to see if you will need to pay AMT.

If you are earning less on your cash than you are paying on the
mortgage, pay off the mortgage.

--
Ron

Over the summer I bought a new house and I sold my previous house of 8
years, which was a legal 2 family. Over those past 8 years I made a
lot of write-offs and depreciations for the 2 family house and now I
will have to pay an estimated
30K-35K in capital gains when I do my taxes next year. So naturally,
any itemized deductions I can get this year will help, such as maxing
out on my 403B plan, mortgage interest,etc.
My question is this: I took out a 30 year 6.25% $333,700 mortgage when
I bought my new house this past summer. I currently have about
$365,000 in cash. I am planning on paying down some of the mortgage
but I wanted to wait until the end of the year to take full advantage
of the interest deduction to help lower what I owe in capital gains.
Does this make sense, or should I just pay down some of the mortgage
now and forget about the interest deduction? Will I save more in the
long run?