Thank you for establishing and moderating is forum. Over the past couple of yrs we've learned a great deal. I have scrolled through the last yr of posts and have found very little on Capital Gain/Loss so I thought I'd ask the following.
Situation:
Parents (we) US & CA citizenship w CA residency, our adult son is dual, he is CA and US resident, he works in BC FT and lives in MT.
Bought city lot in Montana in May '12 in all 3 names, 50/50 partnership w son to help him get started, rec'd financing through local US bank, started bldg small home ($300K) in Sept '12.
Two weeks ago we rec'd an offer to purchase property when completed in Spring '13, house is not listed
Original Intent: son to live in home for 2 yrs, (parents secondary home), help son both establish credit and acquire real estate equity.
Consequence of offer: Capital Gain $50K
Discussion: Taxation on short-term CG is not appealing (IRS and state taxation). Looking for defferal or reduction strategies
Question:
1) Bought land May, rec'd bldg permit Sept, Occupancy scheduled for spring '13. In US, to determine short term / long term CG catagory, when does the clock start ticking?
2) My wife and I have Cap Losses in CA.
May they be used to entirely eliminate our portion of the gain in US?
3)
3) Considering 1031, is occupancy necessary?
4) We are close to retirement so deferring through an IRA/RRSP is appealing - is this possible?
5) Do you have a suggestion?
Advice: Capital Gain/Loss
Moderator: Mark T Serbinski CA CPA