Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Posting-Version: version B 2.10.2 9/5/84; site terak.UUCP
Path: utzoo!linus!philabs!cmcl2!seismo!hao!noao!terak!suze
From: suze@terak.UUCP (Suzanne Barnett)
Newsgroups: net.invest
Subject: Re: Re: Re: Mortgage Down Payments and Good Investments
Message-ID: <923@terak.UUCP>
Date: Mon, 2-Dec-85 19:39:12 EST
Article-I.D.: terak.923
Posted: Mon Dec  2 19:39:12 1985
Date-Received: Sat, 7-Dec-85 15:05:57 EST
References: <1439@decwrl.UUCP> <20@pixdoc.UUCP>, <886@terak.UUCP> <126@rruxc.UUCP>
Organization: Calcomp Display Products Division, Scottsdale, AZ, USA
Lines: 35

> > I believe that one simply has to buy a home costing as much as
> > or more than the sale price of the one that was sold. I don't
> > think the cash realized has to be invested in the new home. I
> > could, however, be wrong.
> 
> > Suzanne Barnett-Scott
> > uucp:	 ...{decvax,ihnp4,noao,savax,seismo}!terak!suze
> 
> I don't think that's right.  My understanding is you pay capital gains tax on:
> (sale price of old house)-(purchase price of new house)-(cost of improvements)
> That is, if you buy a home for less that the one you sell, you can deduct the
> cost of any home improvements you made on the old house from the profits but
> Uncle Sam gets a bite of what's left.

Looks like you didn't understand me. If I sell a house for
$100,000, to avoid capital gains tax I must buy a house
costing $100,000 or more. (I'm not taking your improvement
costs into account. They are another issue, not the one under
discussion.) Suppose the remaining mortgage on the house I
sold was $70,000. That means I receive $30,000 minus realtors
fees and closing costs. I do NOT have to place that $30,000
down on my new house. I can finance the entire cost (assuming
a lender will agree to that) and use my $30,000 for some other
investment. Or, I can use part or all of it for my down. As
long as my new home has a sales price of equal to or more than
my previous home, I avoid capital gains.
-- 
**************************************************************
Suzanne Barnett-Scott

uucp:	 ...{decvax,ihnp4,noao,savax,seismo}!terak!suze
phone:	 (602) 998-4800
us mail: CalComp/Sanders Display Products Division
	 (Formerly Terak Corporation)
	 14151 N 76th street, Scottsdale, AZ 85260