Re: capital gains advice

. dorisno@xxxxxxxxxxxxx
Hi. Please can someone advise?? I am living in my step fathers
house,which he is selling to me.Trouble is I want to get moving on it
but he is so concerned with how much capital gains he will have to
pay. He hasn't lived in the property for over two years now. He
purchased the house years ago for 50k and at the time was advised to
take out a second mortgage that being an endowment one. I have just
had the house valued and its been put at 170-180k. Thus meaning (so
he
presumes)that he will then be left with around 72k in capital gains.
Is this right? I suggested he buys somewhere else and shows himself
to
be living there,but he seems to believe that he would still get stung
for the 40% tax?The whole time its being deliberated I am paying
rent.
I'm no expert on these kind of things,as you probably can tell!,so
some much needed advice would be fantastic please. (Preferably in
lamens terms!!

Basically if he owns rental property and sells it to you he will owe
some
taxes but there are ways of deferring, reducing or possibly
eliminating
these taxes. Perhaps you should advise him to consult with a local tax
professional before selling the property.

He did speak to his mortgage advisor who said it. What about
giving me the house as a gift? do you have to pay the tax on that??

Using a quit claim deed as a way of transferring the house as a gift or
something similar may be your best option but talk with a local tax
professional about all the options and pitfalls.






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