yet another CA tax property Question

[williams_95136]

What is the name of your state? CA

I own a 4 plex in San Jose, ca 70% for me and 30% for my brother. I have been living in it for 7 years one apartment is mine, one is my brothers and two rented, and I am planing to sell it. I have asked two professionals about the income tax I have to pay. one told me that I do not have to pay income taxes since this is our primary resident. and the second told me that I have to pay taxes on 50% only. how is accurate.

thanks

 

[Snipes5]

You own 70%
Your brother owns 30%

25% is your personal residence.
25% is your brother's personal residence.

50% is therefore subject to capital gains tax as investment property. Of this, 45% is yours, and 5% is your brother's.

So you will owe capital gains tax on 45% of the gain on the rental portion and your brother will owe capital gains tax on 5% of the gain on the rental portion.

So the first one was completely wrong, and the second one was "mostly" correct, excepting a few details.

Do hire a professional to do your tax return once this is completed, it's a bit complex.

Snipes