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Hi All:
I am perhaps going to structure a lease-option/lease purchase on a sfr in my area….I may have a partner who will actually live in it..I will have option for 50% ownership and we will hold for at least 10 years….Now, the main concern I have right now is, what happens if Congress (or?) changes the current tax treatment of Lease-Options in relation to the IRS Code 121 before our holding period is up….? Let’s say that for some strange reason, the government decides in 2011 that Lease Options (occupied by lessee) no longer qualifies for 121…..since we acquired it/tied it up during the time period when 121 DID apply; would we still be able to use that? OR,what we have the rug yanked out from under us and end up paying capital gains taxes on all of the gain (vs having had $250k/pp tax free gain per 121 )…?
what happens when codes are changed midstream?
thk you
dALL BETS ARE OFF with this administration.
They are changing things faster then we can dream up counter moves.
There is no way of knowing if 121 will exist in the future or what they rules will be.
It will not matter what the law was when you entered in to the 121.
Especially in CA where you are Donna, they are so desperate for money that they may tax 121’s just like they are proposing 1031’s.
You just have to take your chances.
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