|Real Estate Information|
Tax Free Exchanges: Watch out for the New Residence Rules
On October 22, 2004, President Bush signed tax legislation that contained a provision affecting Internal Revenue Code section 1031 (the like-kind tax-free exchange rules).
Under this new provision a taxpayer who exchanges under Internal Revenue Code section 1031 into a rental house as a replacement property for a previous investor property and later converts it to his or her primary residence, is not allowed to exclude gain under the principal residence exclusion rules of Internal Revenue Code section 121, unless he/she sells the property at least five years from the date of its acquisition.
The results of this additional requirement to Internal Revenue Code section 121 is that anyone exchanging into a rental property that they such subsequently convert to personal use will have to wait at least five years from the date of acquisition before they can sell it as their residence and exclude any gain under Internal Revenue Code section 121.
The change to the home seller rules of Internal Revenue Code section 121 became effective for principal residence sales occurring on or after October 22, 2004. Any taxpayer who previously acquired their current residence through a tax-deferred exchange within the past three years will now have to wait at least another two years before selling their home and excluding any gain, provided they meet the two out of the five-year occupancy test for living in the property.
New legislation created in 1997/1998 allows taxpayers to exclude capital gains tax on their profits from the sale of their principal residence up to $250,000 for single taxpayers and up to $500,000 for married taxpayers provided they have lived in their principal residence for two out of the past five years. Taxpayers can exclude this gain any number of times provided they have met the two out of the five-year occupancy test.
Good luck and until next time,
P.S. Feel free to forward this on to any friends.
Phil Craig is a licensed attorney and entreprenuer.He started practicing law at age 25 in 1979. He does not take on any more clients, but isadvisor to some of the biggest names in the internetworld. He shares his knowledge gained over thelast 25 years at his Living Trust Secrets newsletter site:click here=========>http://www.LivingTrustSecrets.com
** Attn Ezine editors / Site owners **Feel free to reprint this article in its entiretyin your ezine or on your site so long as you leaveall links in place, do not modify the content andinclude our resource box as listed above.
If you do use the material please send us a noteso we can take a look. Thanks.
Tax Deferred Exchanges of Investment and Business Real Estate
The Primary Residence taxation, the Residential Replacement Rollover, Sec. 1034 exception is gone.
Negative Gearing - It's Not to Your Benefit!
The concept of negative gearing has been originally developed to encourage real estate investment in Australia by allowing any income losses from property investment to be deductible from other income as a tax benefit. This means that the taxable income of the owner will be reduced after the deduction and therefore the total tax payable is also reduced.
Property Investment - Buying A Holiday Home in Cyprus
Cyprus is fast becoming a property hotspot for thousands of British holiday home hunters disillusioned with the overdeveloped and overpriced Costas. Famous for its spectacular beaches, a climate that gives more sunshine days than Spain and its rich and varied history, Cyprus offers a perfect mix of foreign and familiar.
Reinventing Real Estate, Part 1: Online and Empowered Consumers Are Taking Charge and Paying Less
For decades, the real estate world turned in a predictable manner. The roles of buyers, sellers and real estate professionals were fairly well defined and transactions followed a predictable path of yard signs, newspaper ads, open houses and miles of paperwork.
How to Use the Internet to Help Your Apartment or House Hunting
So you are looking for an apartment to rent or a house to purchase. One of the most important steps is researching the neighborhood to decide if you really like to live in that area.
Termite and Moisture Damage Not Reported
I have done so many appraisals where I saw obvious damage that was not reported by the other inspectors. The first couple of times I thought it was just carelessness.
Vegas: The New Frontier
Unless you have been living in Siberia, you know that Real Estate is on fire in many places around the country. In fact, you would be hard pressed to find a city where this was not the case.
Selling Your Own Home - Pet Issues
If you are selling you own home, you need to consider the effect of pets. People who are working with a real estate broker are sure to get coached about the potential negative effect of pets.
Dont Forget to Ask About Restrictive Covenants
Homebuyers, especially first-timers, may not think of asking about restrictive covenants. But these clauses dictate what can and cannot be done to or on a property.
3 of the 5 Ways Real Estate Can Take Advantage of Blogs and RSS
Earlier this month, Realtor Magazine announced that they would be featuring an article about Tampa Bay Realtor John Mudd and the success he has been having in attracting prospects and media attention with his blog on real estate. Since then, many others in the Real Estate market have been curious about how to implement similar strategies to capture leads in their areas.
How To Sell Your Home FSBO
You decide to sell your home and believe you can handle the selling process. Good for You!Of course you're a little nervous and that's normal.
10 Ways To Find Investment Properties
If you really want the best deals in investment properties, you have to increase your odds by finding more deals. Who is more likely to get a cheap apartment building, an investor that looks through the MLS listings and calls it a day, or the one that uses ten resources? Here are the ten:1.
10 Important Tips to Successful Real Estate Investing
When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know:1.
Selling Your Home - What Can Go Wrong With Pricing and Loans
So, you're selling your home (house, townhouse, condo, apartment, land, lot, farm, ranch, etc.), what can go wrong? The sad fact is that a lot of things can go wrong.
Utah Real Estate
Looking to buy real estate in Utah? The market has changed over the past few years and is going to continue to change over the next few (drastically) and here are a few things you should consider before buying any Utah real estate.First, the Olympics didn't affect the state as much as people thought it would.
Property Investing - Am I Buying for Profit or Prestige?
All of us have emotional preconceptions and assumptions. They are reinforced and fine tuned by our experiences of life, be they traumatic, disciplined or consistent.
Selling Your Home? A Warning About Attachments
Before you list you home for sale, determine what you don't want to leave behind.Our friends sold their home for full price and moved out a few days before closing.
Do I Need A Real Estate Survey?
Getting a survey before you close on any real estate is very important.Some people actually buy real estate without having a survey done.
Real Estate Investment - One Simple Formula
I saw the ads in our small-town newspaper for years before I realized exactly what was going on. They were always the same: A house for sale with 5% down and payments of 1% of the purchase price.
Selling Investment Houses: Props & Profits
New Marketing and Design Psychology ideas help you stage homes for sale to motivate buyers and generate top dollar. Instead of leaving investment houses vacant, my husband and I add a few props to increase our profits.
home | site map | Blog |
Exchange Links Here | Links page |