Capital Gains Tax Question
Well, it's not ALL gloom and doom. I just got an unsolicited offer on a piece of investment property I purchased 15 years ago.
1. 20% down payment (~2.5X initial investment)
2. Contract terms.
3. Decent interest rate
4. Huge ROI (greater than 12.5X initial investment)
5. No Realtor
6. Escrow Co. to handle payments, taxes, etc. (split fees)
I will be getting paid out over time, but I am worried about Citizen Obama raising capital gains from it's current 15% rate, if he is elected. I don't think it would happen right away, but I don't want to take a chance on the rate going up during the contract period, which could increase my CG tax exposure if I carry a contract and pay as I go.
My thoughts are to declare all of the the CG up front, The DP will more than cover it, then the principal payments will be tax free in the years to come. (I realize that I will still have to pay taxes on the interest, as I receive it, but that should be ordinary income, correct?)
Not interested in doing a 1031 exchange, and this is a good chance to get out of this investment with a good ROI if I carry the contract.
Thoughts? Any of you financial types out there have any CG advice or experience to share as it relates to a RE contract?
I've never sold a piece of property like this, so I wiill appreciate any and all feedback.