Capital Gains on muscle car (state of PA)

[427king]

Ill make one more post and then shut up. You can file to make a "like kind exchange" just like you do with real estate. You must set it up first ,then have 90 days to sell your car and purchase another. You will not pay any taxes on the gain if you flip it into another car of equal or greater value. There are many restrictions so do your home work. You can buy an item of more value and also less value and just pay on the difference in the case of buying a lesser value car. Once the 90 days is up, your done though. Its a great tool if you want to change cars the tricky part is selling your car and buying another in the 90 days,best to work it out with someone whos car you want before you start the clock ticking.

[COPO 70 RS/Z28]

I knew I should have stayed in that Holiday in Express!!!





Great thread guys, Believe it or not this is very interesting stuff!

[YENKO DEUCE REGISTRY]

Be VERY careful with 'Like Kind Exchanges', as non real estate items may only apply to business'. I can check it out if someone really needs to know. I'm sure someone does, so I'll look it up over the weekend.

Let me clarify an earlier post about 'investments'. Investments are actually considered capital assests when held for personal use - stocks, bonds, etc... It's when commercial paper is held for sale to customers, that's not considered cap assests - but more likely 'normal' assets because it's a business.

[firstgenaddict]

what if you have a trust that owns only the car then the buyer has a trust funded with the money to buy the car then you swap the trustee's of them? Technically there is nothing made either way just the control of the trusts?

[YENKO DEUCE REGISTRY]

Here's the IRS Publication 550 snipet regarding Capital Loss Carry-Forwards:

<font color="red">Capital loss carryover.

If you have a total net loss on line 16 of Schedule D that is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you had incurred it in that next year. If part of the loss is still unused, you can carry it over to later years until it is completely used up. </font>

It appears the IRS removed the time limitation on Loss Carry-Forwards! So, hang onto them.

[John Brown]

The farmers newspaper that I subscribe for the estate auction listings had an article not long ago about the feds tightening the regulations on like kind 1031 exchanges. Seem as they had been lax and were allowing most any type of exchange to qualify. Now they're going to hold the exchanged propertys to really be like kind, example, no trading farm land for apartment buildings, as they had allowed in the past.

1031 exchange rules

Read em before you need em.

[Belair62]

[ QUOTE ]
Be VERY careful with 'Like Kind Exchanges', as non real estate items may only apply to business'.

[/ QUOTE ]

I have been told this never been tested in court with cars being used as a Like Kind.....I wouldn't want to be the test case. Let Uncle Sam have his share. Less ulcers that way.

[427king]

[ QUOTE ]
Let Uncle Sam have his share. Less ulcers that way.



[/ QUOTE ] Thats is certainly the best advice. If there are two ways something can be interpreted , assume the worst option and you will be fine.

[YENKO DEUCE REGISTRY]

[ QUOTE ]
[ QUOTE ]
Let Uncle Sam have his share. Less ulcers that way.



[/ QUOTE ] Thats is certainly the best advice. If there are two ways something can be interpreted , assume the worst option and you will be fine.

[/ QUOTE ]

Unfortunately, both quips of advice are true. The IRS is in the business of making money, plain and simple, the politicians are trying to make exceptions for their constituancies (votes!) - hence the reason for our tax code instead of a flat tax!

[Unreal]

One of the biggest surprises I learned when I bought my company 4 years ago, was how much effort goes into tax minimization. It seems like every year, I spend the first 11 months trying to maximize profit, and then spend December trying to minimize the first 11 months efforts.