Because today homeowners have a lot of equity in their homes and prices have soared in the past 5 years, knowing whether you have to pay capital gain taxes is very important when making the decision to down-size your current home and/or sell and cash out.
When we have rental properties, we defer taxes by conducting a 1031 tax deferred exchange which is a convenient and easy process. Call me if you have any questions regarding doing a 1031 exchange.
When we own a home and have a net profit of $500,000 if you're married or $250,000 if you're single, the process of figuring out whether you will have to pay taxes gets a bit more complicated.
Your first plan of action is to speak with your CPA or tax preparer because they have first-hand knowledge of your tax bracket, exemptions, etc.
Your second plan of action is to speak with me so we can discuss what it is you would like to do because depending on what you do, you may not have to worry about capital gain tax.
The great thing is you have options and let’s discuss them if you are thinking of making a move BEFORE you make any real estate moves.
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Source: MSN
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