IANATA, but in my understanding, he’s right, You need to have another rental property already lined up when you sell, and not directly receive the funds, or else you’re paying capital gains.
And while I don’t like paying capital gains taxes, or any taxes at all for that matter, it does sound like a humble brag to mention that you’re paying income taxes and/or capital gains taxes. JSM is right, just suck it up and pay the 15% (or 20% if you’re a roller)
his context was based on a client who cashed out and didn’t prepare for the taxes at all. put all the money into…something else. then when tax time came and he learned he owed 20% had a shit fit.
so yes, it was capital gains prep. plan for it. once you get your head around that, i agree with JSM. there’s other details of it that i have to understand better (basis and impact of deferred paper losses) to track the amount to hold. i also consider moving back into the rental at some point to avoid the taxes altogether by making it primary residence again at some point.
23.8% if you are a roller. (I have bitched about this before) And that is just federal, not state nor local.
There’s lot’s of conventional wisdom that is wrong, wrong, wrong about the details of the tax code.
It sounds like you’re a roller. Congratulations!