Can any CPA confirm this?

来源: ConeHead 于 2010-11-20 22:11:27 [] [博客] [旧帖] [给我悄悄话] 阅读数 : (974 bytes)
本帖于 2010-11-21 08:29:54 时间, 由普通用户 jy101 编辑

Two examples

Case A: bought property at $400K, 5 years later, sell property at $400K, 5-year depreciation total 50K.

With depreciation recapture the capital gain is $50K.

Case B: bought property at $400K, 3 years later, market rose and cashed out $70K. 5 years later, market drops back and sell property at $400K, 5-year depreciation total 50K.  

My old understanding is, after cashout refinance the cost basis should be adjusted lower by $70K, therefore with depreciation recapture the capital gain is $120K.

However I was just told by an "expert" that in case B, cost basis does not change after cashout refiance and the capital gain is still $50K!

Is this ture? That $70K is a pure tax-free money?

If this is true, no wonder people like to do cashout refinance over and over to lock in the gain tax free!

所有跟帖： 

• 我不是 CPA， -RE8888- ♂ 给 RE8888 发送悄悄话 RE8888 的博客首页 (657 bytes) () 11/20/2010 postreply 22:25:42

• what if it is not a short sell, it is a regualr sale to 400K in -mickey222- ♀ 给 mickey222 发送悄悄话 mickey222 的博客首页 (0 bytes) () 11/21/2010 postreply 04:39:48

• What's your question? -RE8888- ♂ 给 RE8888 发送悄悄话 RE8888 的博客首页 (0 bytes) () 11/21/2010 postreply 10:29:15

• Isn't it obvious? -ConeHead- ♂ 给 ConeHead 发送悄悄话 ConeHead 的博客首页 (77 bytes) () 11/21/2010 postreply 10:31:36

• but you will pay back when you sell. -RE8888- ♂ 给 RE8888 发送悄悄话 RE8888 的博客首页 (104 bytes) () 11/21/2010 postreply 10:35:13

• What if I never sell? -Conehead- ♂ 给 Conehead 发送悄悄话 Conehead 的博客首页 (100 bytes) () 11/21/2010 postreply 10:38:16

• Yes,Yes。 -RE8888- ♂ 给 RE8888 发送悄悄话 RE8888 的博客首页 (183 bytes) () 11/21/2010 postreply 10:52:42

• question -connecting20- ♀ 给 connecting20 发送悄悄话 (416 bytes) () 11/21/2010 postreply 13:29:26

• After step-up, kids cost base is the market value -RE8888- ♂ 给 RE8888 发送悄悄话 RE8888 的博客首页 (175 bytes) () 11/21/2010 postreply 14:31:20

• The cash-out part of the cash-out refi -sunskitehomes- ♂ 给 sunskitehomes 发送悄悄话 sunskitehomes 的博客首页 (373 bytes) () 11/21/2010 postreply 07:31:09

• 知税避税，节流开源。 还是泡泡好哇！ -美西游子- ♀ 给 美西游子 发送悄悄话 美西游子 的博客首页 (0 bytes) () 11/21/2010 postreply 09:23:55

• or used it for other personal use, like vocation or child educat -RE8888- ♂ 给 RE8888 发送悄悄话 RE8888 的博客首页 (246 bytes) () 11/21/2010 postreply 10:27:26

• I think the rationale is this: -Conehead- ♂ 给 Conehead 发送悄悄话 Conehead 的博客首页 (180 bytes) () 11/21/2010 postreply 10:36:21

• base doesn't change because the 70k are borrowed money.. -jy101- ♂ 给 jy101 发送悄悄话 jy101 的博客首页 (87 bytes) () 11/21/2010 postreply 08:31:20

• Right. At the time sell, you need pay back the borrowed money... -4008- ♂ 给 4008 发送悄悄话 4008 的博客首页 (104 bytes) () 11/21/2010 postreply 09:24:06

• 难怪白菜收成比股菜好。赶紧去买良种去！ -美西游子- ♀ 给 美西游子 发送悄悄话 美西游子 的博客首页 (0 bytes) () 11/21/2010 postreply 09:25:31

• Yeh, when the market goes up -Conehead- ♂ 给 Conehead 发送悄悄话 Conehead 的博客首页 (108 bytes) () 11/21/2010 postreply 10:33:03

• That's called RE's leverage. -RE8888- ♂ 给 RE8888 发送悄悄话 RE8888 的博客首页 (23 bytes) () 11/21/2010 postreply 10:37:07

• Hey, noconfusion and waterwater -Conehead- ♂ 给 Conehead 发送悄悄话 Conehead 的博客首页 (86 bytes) () 11/21/2010 postreply 10:41:21

• the cash-out is not income, it is borrowed money. -OptionsKing- ♂ 给 OptionsKing 发送悄悄话 (373 bytes) () 11/21/2010 postreply 11:04:52

• Key point： Debt forgiven is equvalent to imcome ！ -RE8888- ♂ 给 RE8888 发送悄悄话 RE8888 的博客首页 (0 bytes) () 11/21/2010 postreply 11:22:03

• and IT SHOULD BE! OR -美西游子- ♀ 给 美西游子 发送悄悄话 美西游子 的博客首页 (26 bytes) () 11/21/2010 postreply 18:41:04

请您先登陆，再发跟帖！