Is There a 3.8% House Sales Tax in the Health Care Bill?

Posted by on Feb 27, 2012 in Condos, Single Family Homes, Taxes Deductions | 0 comments

 

There has been a lot of talk about the new Health Care Bill and how it would affect you when you sell your  South Florida home or condo. I’ve provided some information for you but just a note I am not an accountant and give you this information just as a simple answer to the misconception. Understand that, when it comes to IRS regulations, you should check with your accountant for the most accurate and up-to-date information.

Fact Check.org explains it this way:

The truth is that only a tiny percentage of home sellers will pay the tax. First of all, only those with incomes over $200,000 a year ($250,000 for married couples filing jointly) will be subject to it. And even for those who have such high incomes, the tax still won’t apply to the first $250,000 on profits from the sale of a personal residence — or to the first $500,000 in the case of a married couple selling their home.

We can understand how this misconception got started. The law itself is couched in highly technical language that only a qualified tax expert can fully grasp. (This provision begins on page 33 of the reconciliation bill that was passed and signed into law.) And it does say the tax falls on “net gain … attributable to the disposition of property.” That would include the sale of a home. But the bill also says the tax falls only on that portion of any gain that is “taken into account in computing taxable income” under the existing tax code. And the fact is, the first $250,000 in profit on the sale of a primary residence (or $500,000 in the case of a married couple) is excluded from taxable income already. (That exclusion doesn’t apply to vacation homes or rental properties.)
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Owning a Home, The BEST Investment Out There

Posted by on Jan 5, 2012 in Condos, Davie, Foreclosures, Plantation, Rental, Short Sales, Single Family Homes, Taxes Deductions, Weston | 0 comments

 

“[R]enters have only a fraction of the net wealth of owners. Near the peak of the housing bubble in 2007, the median net wealth of homeowners was $234,600—about 46 times the $5,100 median for renters. Even if homeowner wealth fell back to 1995 levels, it would still be 27.5 times the median for renters.”
 

 After reading this article I had to share with you and reiterate that you future financial security LONG TERM is in Real Estate!

Thanks Steve Harney of Keep Current Matters

We recently posted Real Estate: Today’s Golden Opportunity comparing the current housing market to the market for gold about a decade ago. Some commented on the fact that you can’t compare gold to real estate as an investment as gold is a very liquid asset and it would take more time and effort to sell a house. We were not trying to make the case for real estate vs. gold as an investment in our blog. We were just showing that all investments go through cycles and that the best time to buy any investment may be when everyone is saying not to.
However, since the subject of comparing real estate to other investments has come up, let’s take a closer look. There are two major advantages to investing in a home of your own rather than another option:

  • You Can’t Live in Your IRA

    When you buy your own home you are not taking available dollars away from another investment. You are replacing one housing expense (rent) which has no potential for a return on investment with another (mortgage payment) that does give you an opportunity for a return. We realize that there has been research showing that over the last 30 years renting has been less expensive than owning. That research also says that if you invested the entire difference between the rent payment and mortgage payment you may have done better financially.  There are two challenges with this conclusion:

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Deducting a loss on a real estate sale

Posted by on Dec 28, 2011 in Condos, Rental, Single Family Homes, Taxes Deductions | 0 comments

 

 

As the end of the year is only a few days away I wanted to share some information with you that some other agents and I were discussing that our clients were dealing with here down in  South Florida. So I asked one of my Tax experts to share some information with you about  deducting losses on a Real Estate sale.

Due to the weak real estate market, many homeowners are forced to sell at a loss, if they are able to sell at all. But does this dark financial cloud have a silver lining? Can a homeowner deduct a loss from income taxes?

Unfortunately, the answer to that question is no, as a loss incurred on the sale of a personal asset such as a personal residence is not deductible.

But there is a way to deduct a loss on the sale of a home: You can convert it to a rental before you sell.

This requires you to rent out the home to someone who is not related to you for a reasonable market rent. Moreover, you’ll have to report the rental income you receive to the Internal Revenue Service — but you may have little or no taxable rental profits due to depreciation and other deductions for rental expenses.

When you convert your residence into a rental, you convert it from a personal asset to an investment asset. Losses on the sale of investment assets are tax-deductible.
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Mortgage interest tax deduction: safe until after 2012 election?

Posted by on Sep 14, 2011 in Taxes Deductions | 0 comments

 


Congress’ supercommittee met for the first time last Thursday. They took preliminary peeks at alternative combinations of spending reductions and revenue increases. Severe cutbacks or elimination of longtime tax preferences as the mortgage interest deduction and local real estate write-offs were on some of the menus that floated into the staff. So what does this mean for homeowners?

Here’s what Tara-Nicholle Nelson author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.”

Q: I recently purchased my first property. My concern is: Will the home mortgage interest deduction (MID) still be available for use? –Roberto

A: As you know, homeowners are currently able to deduct the interest they pay on their mortgages, by and large — the tax code also authorizes homeowners to deduct their property taxes.

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