Q: I made a major investment in a project involving the conversion of garden apartments into condominium units. The project has been completed, and I own the equity in a professional, or three-bedroom unit. It would be ideal for a dentist, doctor, etc., or for someone wanting a ground floor residence, with ample parking. But I have not found a purchaser or a renter. My problem is monthly payments on the mortgage and monthly condominium fees. After nine months I am almost ready to forget about a profitable sale or lease of the unit. How can I be relieved of the mortgage and condominium fee payments, which totaling over $400. per month?
A: You can be "relieved" of the mortgage payments and condo fees through (1) sale of the condo or (2) foreclosure on the mortgage, and consequent transfer of title in either situation.Under certain circumstances you (or you and your wife) can incur significant personal liability -- in addition to losing your equity in the condo -- if there is a foreclosure.
So let's look at the possibility of sale. Almost all real estate is saleable at a sufficiently attractive price, or on sufficiently attractive terms, or with a combination of both. I suggest you retain a knowledgeable real estate broker who can combine price and terms to sell the property. Better give him or her an exclusive listing for a minimum of four to six months.
Q: I am one of four heirs to a farm in Virginia. A value of $59,000 was placed on this farm when we inherited it in 1972, so we did not have to pay Federal inheritance tax. Now, we want to sell the farm for three times that amount. Will we save on capital gains tax by waiting until 1980?
A: No. The Revenue Act of 1978 provides that the increase in the capital gains deduction, the elimination of the maximum tax offset, and the increase in the capital gains tax preference are effective for taxable transactions occurring, and installment payments received, after Oct. 31, 1978. The act repeals the alternative tax for noncorporate capital gains for taxable years beginning after December 31, 1978.