Capital gains tax

[iggybr]

We are selling our property and would like to roll over the capital gains into a liveaboard full time cruising sailboat. We picked our boat, a Stevens 47, and all that is left is to minimize our capital gains tax hit so we can afford to cast off.
Does anyone know of a tax consultant that can help? We don't live in our property but have owned it for 25 years. Any help would be great.

[belizesailor]

By "roll over" do you mean a 1031 exchange? If so, that must be for the same type of asset and is typically restricted to investment real estate for the same. I dont think there is anyway to make that fly for a boat.

[iggybr]

Thanks for the reply. Going to keep trying. On another note saw you listed a Hobie 33. We shipped a Hobie 33 to australia 15 years ago and she is currently wreaking havoc on the Hobart race scene with her new owner. Loved that boat!

[belizesailor]

Do you have any other loses you can use to offset the gain (like carry forward losses)?

Yes, the H33 is an awesome boat! Raced mine recently in a just for fun regatta on the Rio Dulce. Showed up about 10 minutes late for the start and chewed up most of the fleet by the finish!

[emoji41]

[PaulinOz]

You have a capital gain debt you owe the ATO on an investment property that is being sold at a book profit. Then you want to roll that debt over to avoid paying it at present into a vessel that is not an investment, but going to be your full time future home.

You will need a very special sort of accountant to make that fly. Good luck with the search. Please let us know if you manage to make it work.

[daletournier]

I also have capital gain tax to pay on the sale of a business last year grrrrrrrr.... I purchased my current boat not long after.

As far as I know there is no way you can do this. You can defer the the tax by putting it into your superfund (assuming you have one) but then you lose access to that money in regards to purchasing a boat, and from my perspective a certain amount of control of your money, not for me.

If you find some possible way please let me know prior to April, I'd owe you way more than a beer if you find find some loop hole.

[belizesailor]

Originally Posted by daletournier

I also have capital gain tax to pay on the sale of a business last year grrrrrrrr.... I purchased my current boat not long after.

As far as I know there is no way you can do this. You can defer the the tax by putting it into your superfund (assuming you have one) but then you lose access to that money in regards to purchasing a boat, and from my perspective a certain amount of control of your money, not for me.

If you find some possible way please let me know prior to April, I'd owe you way more than a beer if you find find some loop hole.

"Superfund"? What is that?

[daletournier]

Originally Posted by belizesailor

"Superfund"? What is that?

It's the Australian equivalent of your 401k...if I understand your 401k.

A employer has to contribute 9% of an employees pay (9% on top of wage)to the employees Superannuation fund. The employee dosent have to contribute to his/her own pension fund, employers responsibility.

[keepondancin]

Similar problem, often thought about converting to cash, sticking it in the bow of the boat, and finding a new life somewhere else. The idea of it being a gain is hard to grasp. You pay tax on inflation. It is the same property as it was 40 years ago, just a couple more zeros on the potential sales price. Plenty of tax was paid on the income it generated.

[belizesailor]

Originally Posted by daletournier

It's the Australian equivalent of your 401k...if I understand your 401k.

A employer has to contribute 9% of an employees pay (9% on top of wage)to the employees Superannuation fund. The employee dosent have to contribute to his/her own pension fund, employers responsibility.

Ah, thats why Ive never heard of it...Im USA.

Just noticed the OP is in Oz (or thats whats on his profile anyway)....disregard my earlier post about 1031 exchanges...thats USA tax law...I dont know jack about Aussie tax law.

[belizesailor]

Originally Posted by keepondancin

Similar problem, often thought about converting to cash, sticking it in the bow of the boat, and finding a new life somewhere else. The idea of it being a gain is hard to grasp. You pay tax on inflation. It is the same property as it was 40 years ago, just a couple more zeros on the potential sales price. Plenty of tax was paid on the income it generated.

If you are a USA then thats a big decision (assuming you mean abscond with the dollars...wait they are your dollars [emoji34]...but Uncle Sam wants his cut...same way organized crime works...hmmm...is there a similarity here?). Anyway, Uncle Sam has some serious muscle called the IRS...dont mess with the IRS...better to shoot someone in broad day light on a crowded street.

Ive seen the IRS swoop in and confiscate boats and real estate here in Central America...Uncle Sam has long arms. So that "new life" somewhere else could come to a sudden unpleasant end if funded by Uncle Sam's cut.

I've got Canadian friends who chose to skip out to Spain over a tax issue (in all fairness they were really getting screwed), but I dont think Canada is quite as agressive about getting their cut.