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Simple Things You Should Know About Realestate Tax Law
from:Investing in real estate has many tax complications. Yet, real estate is one of the best financial investments you can make, so it’s well worth figuring out the tax laws that go along with it. Following are some of the simplest and most important things that everyone should know about real estate tax law.
You don’t pay capital gains taxes on the sale of your primary residence – This is a change to real estate tax law that happened just a few years ago. Unless your profit on the sale of your home is greater than $250,000 if you’re single, and $500,000 if you’re married, you don’t pay capital gains tax when you sell your home. And, if your profit is greater than these amounts, you only pay capital gains taxes on the profit over these amounts. So, for example, if you’re single and you make a $300,000 profit on the sale of your home, you’ll pay capital gains taxes on $50,000, not on the entire $300,000. This real estate tax law applies only to the sale of your primary residence, and you must live in the home for at least two years to declare it your primary residence.
There are ways to avoid capital gains taxes on other real estate – It is possible to avoid paying capital gains taxes on properties you sell that are not your primary residence, too. The first is to live in the property before you sell it, so that you can claim it as your primary residence. As long as you have lived in a home for at least two of the five years just before you sell the property, it qualifies as your primary residence. So, let’s say you buy a new home and rent out your old one for a while. As long as you sell this rental property within 5 years of moving out of it, according to real estate tax law, you can claim it as a primary residence when you sell it.
According to real estate tax law, another way to avoid paying capital gains taxes on your real estate when you sell it is to invest the profits back into a real estate investment. If you use your profits from selling a piece of real estate to purchase another piece of real estate within two years, you’re exempt from capital gains taxes. Many investors use this piece of tax law to help them own more and more expensive second homes. Each time one home appreciates enough to give them a nice profit; they sell it and purchase another, more expensive home.
Understanding real estate tax law can help you make better decisions when it comes to buying and selling real estate. Keep abreast of the laws and real estate is a great investment for the long or the short term.
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Estate Tax Law News
Estate Tax Changes (Mondaq)
Under current law, the first $2 million of an individual's estate will pass without incurring federal estate taxes. (This is referred to as the "federal estate tax exclusion amount".)
Read more...Tax law change opens back-door route to grab a Roth IRA (Fortune Small Business via Yahoo! Finance)
Paul Heck owns EveryHome, A successful real estate brokerage in suburban Philadelphia. The 53-year-old never considered making a Roth IRA part of his retirement plan. While Heck understands the substantial tax advantages of a Roth, he makes too much money to qualify.
Read more...Estate Planning Lawyers Steve Oshins and Richard Oshins Named Among Best Lawyers in America for 2009 (PR.com)
Attorneys Steve Oshins and Richard Oshins were named in the 2009 edition of “The Best Lawyers in America®” in the specialties of Tax Law and Trusts and Estates. Selection to Best Lawyers is based on an exhaustive and rigorous peer-review survey comprising more than 2.5 million confidential evaluations by the top attorneys in the country. [PR.com - October 14, 2008]
Read more...Planning matters: Proper planning can avoid federal estate taxes (Times Herald)
You probably have heard a lot of talk about the federal estate tax and its so-called repeal.
Read more...Attorney Michael H. Smith Attends Leading Edge Estate Planning Conference (PR.com)
Local Estate Planning Attorney, Michael H. Smith of Smith Barid, LLC, attended an educational conference in San Diego, CA in October sponsored by the American Academy of Estate Planning Attorneys. The Academy is the premier national educational organization that promotes excellence in estate planning by providing member attorneys with research and vital updates in estate planning law for 15 ...
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