Expert: Dick Dennis - 8/29/2007

Question
Hi,
I moved from my first home almost two years ago, and decided not to sell it
in the current market. However, if i don't sell it in the next year the capital
gains tax will be significant. My realtor suggested creating a trust, where I am
the trustee and then selling it to the trust and having it become a rental
property. (In this way, I'd be able to raise the nontaxable base).

Can this be done?
antonia

Answer
I may be wrong, but I doubt it, Antonia, but all that will do will put an investment property into your trust. The property will then be treated as such. However, if it becomes an investment property, you may defer any capital gains by trading it in a 1031 exchange (tax deferred as long as you trade for a property with a higher basis). I strongly suggest you consult with your favorite tax expert to verify what I suggested. I do wish you well.

Dick Dennis