Need help with net profit on sell of rental property

Chris · #1 (**permalink**) 03-13-2006, 05:07 PM

Can somebody help me out with this scenario?

Buyer would like to sell his rental property here in Las Vegas, NV. He has had this rental for over 3 years.

Selling Price $310k
Existing Balance $200k

The buyer is using a disount brokerage that will sell his house for $1290 + 3% co-op commission.

I am not sure what his tax implications would be, so the buyer would like to know what his net profit would be after the sale?

He will be using this profit as a down payment on a owner occupied home, with a loan through me.

Any input is appreicated!

Chris · #2 (**permalink**) 03-13-2006, 05:19 PM

Oh forgot, property was purchased for the same amount of the balamce, $200k, has interest- only loans.

Erik · #3 (**permalink**) 03-13-2006, 06:01 PM

You should bring in a CPA for tax implications. My understanding is if it's been the primary residence of the borrower for 2 of the last 5 years then there's a $250,000 capital gains waiver if the surplus is put down on the new property.

Secret! · #4 (**permalink**) 03-14-2006, 11:27 AM

I completely agree with Erik, you should not be giving any tax advise ... ever.