Avoiding tax on investment draw/ repayment

[christijoguhn]

A tax client is considering pulling some extra out of his investment  this year- in order to build a building on his new property (say $50k.   He will be selling his current home and have cash flow coming from that sale.  If it does indeed happen all in the same year....  Can he replace the investment draw in order to avoid the taxation on it? Is there a certain time period that a person can do this?   It seems so basic- but I cannot find any information directly.

[sjrcpa]

No such thing as a tax-free rollover for taxable investment accounts.

Maybe he could borrow against the investment account. But this is expensive.

[abctax55]

Define "investment" account?  Is it a retirement account?

[qbteachmt]

"pulling some extra out of his investment this year"

For investments, the amount taken isn't by default taxable. The Gain would be taxable. Amount from sales minus Basis = Gain. And if it's long term, it's taxed differently than ordinary income.

"selling his current home and have cash flow coming from that sale"

If he meets the eligibility factors, he can exclude up to $250,000 gain from taxes, or $500,000 if he is married and they both are eligible.

"Can he replace the investment draw in order to avoid the taxation on it?"

If it is just money, there is no tax on drawing your own money. If it requires selling or other closing out of the investment type, then it would be evaluated to see if it is a taxable transaction.

"It seems so basic"

The specifics matter. Your wording is very vague.

[dkh]

There is a 60 day window to return funds to an IRA account that was withdrawn from an IRA account

Is that the information you are looking for?

[rcooley25]

I agree with what you say 100 percent. I have had to deal with this same problem regarding investment account.

[qbteachmt]

"regarding investment account"

Regarding retirement investment or nonretirement investment account. That's why details matter.