Can you get OUT of paying Capital Gains?
A: Hmm. I wonder why real estate is such a WISE investment? Hmmm. Hmmm. Could it be tax benefits? YES! Read this very important post on taking advantage of Uncle Sam and build wealth for YOU!
I will start out this article with a early warning for all potential homeowners out there:
Keep an eye out for Tax Code Reform which seems very likely will change the tax benefits that current real estate investments produce
Now that 'another' housing related red flag just went up, lets analyze the 2 most commonly used tax benefits that can help you RIGHT NOW to avoid or defer paying Capital gains taxes to Uncle Sam!
1031 Exchange ('Starker' Exchange)
Allows a tax payer to defer the paying of taxes on a gain when an investment property is SOLD & a new property of like or greater value is PURCHASED. In other words, if you first purchased a property for $400K, and then 1 year later sold it for $500K, you can then defer the payment of taxes on the $100K Capital gain in this transaction, as long as you purchase another property worth $500K or more.
Primary Residence Tax Benefits
If you have lived in your property, as your primary residence, for at least 2 out of a period of the last 5 years, you will not have pay Capital gains taxes on the profit when you sell. This benefit equals up to $250K of tax-free gains for singles, and up to $500K of tax free gains for married couples. Of course, this is dependent on how you filed your last tax return; single or married.
Comments (5)
A leading 1031 tenants in common (TIC) exchange services that helps to learn exchange rules and to find 1031 replacement properties. Also a guide for useful information on Tenants in Common and Property exchanges.
Posted by 1031exchangetotics | October 12, 2006 6:58 AM
A leading 1031 exchange and TIC service provider with expertise in 1031 exchange rules and finding 1031 replacement properties. We provide guidance on Tenant in Common investments and 1031 Property exchanges
Posted by 1031exchangetotics | March 26, 2007 2:42 AM
This is a very good informational site about 1031 tax exchanges. www.1031taxexchange.org
Posted by 1031 tax exchanges | July 1, 2007 12:56 AM
another good site for tenant in common investments
Posted by tenant in common | July 12, 2007 6:52 PM
This is a great site, from a leading Natiaonl "Qualified Intermediary" to learn more about 1031 tax deferred exchanges - www.apiexchange.com.
The site also has articles on 1031 exchange issues unique to New York City including exchanging coops and transferable development rights.
Posted by Scott Saunders | April 1, 2008 2:06 PM