I have someone with 3 rental properties who is now selling one of them.
He is saying that he beleives capital expenses from ALL properties can be offset against the one being sold so utilising all the capital costs such as solicitor, stamp duty etc from all 3 properties now against the one being sold. This sounds too good to be true, I would assume you can only offset costs incured against the specific property being sold rarther than them all?
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...and did he then misunderstand what that man told him because he was so inebriated himself?
CabrioChris, you are correct in your thinking and your client is not.
He is saying that he believes capital expenses from ALL properties can be offset against the one being sold so utilising all the capital costs such as solicitor, stamp duty etc from all 3 properties now against the one being sold.
He's been talking to the bloke down the pub.
I bet he believes nobody even landed on the moon.
And you're right - it's too good to be true.
...suppose you follow his route. What happens when he sells the other two? No doubt he will come up with some sort of capital cost at that point too?
Surely, he'll be able to use the loss created by including the costs of all three houses against the sale of the first.
Loses this year's annual exemption, though.
I wonder if the guy in the pub was thinking about section 244 of TCGA 1992? (I'm not saying that it would apply here, but it might at least explain where the nonsense originated.)