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Couple of questions regarding selling my house.

  1. I live overseas and have done for 10 years now. I am looking to sell my property in Louisiana which has been a rental property. As I have not lived in this home for 2 of 5 years I believe i may be liable for Capital Gains Tax, does this still apply even if we purchase a "like kind" property in another State?

  2. I owe approx $70k on property, house is valued at approx $150k. Is there any value in paying mortgage off before selling or would this just be hit by taxes?

Appreciate any info you good people can pass on. Thanks in advance. KR

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As I have not lived in this home for 2 of 5 years I believe i may be liable for Capital Gains Tax, does this still apply even if we purchase a "like kind" property in another State?

You're talking about the 1031 exchange. If you make a qualified exchange, then you can defer the gain and reduce the basis of the newly acquired property. However there are strict rules on qualifying for 1031 exchange, so talk to your licensed tax adviser (EA/CPA licensed in Louisiana) as to how to proceed.

Otherwise - capital gains tax, yes.

I owe approx $70k on property, house is valued at approx $150k. Is there any value in paying mortgage off before selling or would this just be hit by taxes?

Typically you pay off the mortgage before the sale by giving enough money to the bank to cover the remaining balance.

There's no value in paying mortgage off before selling other than the savings on the interest you won't have to pay. On the other hand you have the opportunity loss of the cash you need to use for that which I assume is not currently liquid. If you're selling anyway - just pay off at closing.


If you're doing a 1031 exchange, the mortgage payoff is considered boot, so in this case there may be significant value to pay off early. Talk to your tax adviser.

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