We have a prperty owner friend in a dilemma:
1- Sell 'low' now @ 850k w/ capital gains
OR
2- Sell in 12 yrs @ _____??? to 'break even' and beyond to exceed fixed income growth of 4(?)%
OR
3- Make primary residence in 12 yrs and sell after getting out from under capital gains
I know this is very sketchy and a financial professional will be consulted but I thought I'd give this a try.

 

Need more info. Net proceeds after capital gains would be what? That vs. selling in 12 years would be what? The difference invested over that 12 year period at a modest rate of return would be what? etc. etc. The bottom line is what does this person really want to do.

 

One more thought. Selling now 'low', would a profit still be made? If so, this may be the way to go. Housing prices now, even in this market, are substantially higher than the average over the past 100 years. Who knows what will happen in the future, but take the money and run is always a good option.

 

I believe that if your friend has a house on the property and can live in it for 2 out of 5 years that they can then sell it with no tax on the gain since it is then considered a primary residence.

I think the amount is high enough that your friend should seek out a CPA to go over the options.

 

Thanks guys, looks like they'll wait.

 

Capital gains rates are the lowest they have been in almost 40 years. If you look at our current budget situation, you might guess they won't stay this low. Many real estate people are selling now and paying the capital gains at low rates instead of doing 1031 tax free exchanges.

 

Speaking of investment and capital gains, I've decided to defer putting any more money into the market for the next few months (or at least not large amounts) and concentrate on putting it into what I know is a good investment - my condo. Redo the guest bath in the Fall. That leaves the master bath at some point thereafter and I'm done!

 

It doesn't matter what you do. Check this out!


http://finance.yahoo.com/tech-ticker/artic...Crisis?tickers=

 

I also read an article recently that said the individual investor doesn't stand much of a chance to influence what happens to his/her portfolio because the market is driven by the big investors, like pension plans. We little people are just pawns in the process.

 

Buying and holding a diversified stock portfolio seems to work for me. Large investors help smaller ones by providing liquidity and additional cash infusions. How in the world do little people lose out?