Quote:
Originally Posted by Kco
3. If used to trade up or into something bigger you can get around capital gains altogrether if you don't take an outright cash out, depending on how you complete the transaction.
For example if you consign it to an AH, and utilize the final amount it sells for as a credit towards another purchase on that auction, you will not have to pay taxex on the sale.
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As Peter notes, this used to be true, but is no longer true. 1031 exchanges, also known as like kind exchanges used to be applicable to all sorts of assets, including cardboard. Beginning with the 2017 tax reform, only real estate qualifies for 1031 exchanges.
So you can no longer trade up by using sales proceeds to buy something else, and avoid tax on the gain.
I mean, I guess you can. I'm not your mother, and no one is going to stop you from doing it. You're just breaking the law, because you have tax due that you're not paying, and if they catch you then it will not be fun when you get to pay the back tax, plus interest, plus penalties.