When you invest in real estate, you have to have a long term vision and patience. Unlike buying stock which can be readily purchased and sold, investing in real estate does not afford a quick sale. While it is true that in years past, people were able to flip properties and make fast money in real estate, for most real estate investors the idea is to buy and hold real estate. Some investors in real estate will benefit from federal income tax breaks and other investors in real estate can hold a piece of property and later sell it and buy other property while deferring the payment of any federal income taxes until the real estate is cashed out. Real estate is not a liquid investment and you may need to consider a long term strategy or option even if you are considering a shorter term investment in real estate. Read our articles on investing in real estate and learn about problem tenants and how to handle them. Learn about finding the right team to help you navigate the world of real estate investing. And, finally, learn about how to structure your investments, insure your real estate investments and minimize your federal income taxes.
Managing Capital Gains Exemptions on Two Properties
A couple owns two properties and would like to sell both of them with a minimum of capital gains tax. Capital gains tax exemptions require certain conditions for the use of the property. Ilyce reviews capital gains tax requirements and suggests the couple consult their tax preparer for what makes the most sense. for their properties.
Using Rental Income For College
A couple disagrees on how to save for there children's college education. Should they save for college using traditional methods such as CDs and stocks or the income from their rental properties? If the rental properties are an investment strategy that's working for them, it's worth sticking with.
1031 Exchange Can Help Swap Rental Properties
A rental property owner considers selling property to buy a building closer to home. Having rental property so far away is risky because you can't check on how the property is being maintained. A 1031 exchange can help this investor sell his rental property for a new one and defer taxes.
Is Buying Condo For Son An Investment Property?
A parent helps out a son with the down payment on a condominium. Learn why one should avoid making this an investment property and how to plan for the condominium in the estate.
1031 Exchange: IRS Rules For Investment Property Purchase
A father wonders if he can do a 1031 exchange and rent back the newly purchased investment property to his struggling son. Sam discusses the details of the 1031 exchange commonly known as Starker trusts, the IRS rules behind them and how they apply to investment property. One key point: a good real estate attorney will help you navigate the IRS tax rules about a 1031 exchange and how it applies to investment property.
Avoiding Capital Gains Tax on Condo Sale
A condo owner makes money on the sale of his condominium but still needs to pay taxes. He never lived in the investment property and it is considered a short-term investment. Short-term investments fall under the maximum tax rate. With other kinds of investment property, you may be able to avoid capital gains tax with a 1031 exchange or a Starker Trust
Aloha: Got Sticker shock? You Will If You Want to Live on Maui
The mainland might be freezing, but it's another beautiful day in Paradise. The only trouble is, if you want to live here, you've only got two choices: Win a huge lottery pot, or be content in a tent on the beach.
Capital Gains On Rental Property
Upon the sale of a home, a homeowner will have to pay capital gains taxes and, in addition, may have to pay taxes on any depreciation taken on the property over the years. A 1031 exchange may be used to avoid taxes on investment property. Buying a like-kind property could allow the homeowner to use a 1031 exchange on the investment property.
Capital Gains Taxes On Farm Property
Even if your property is considered farm land, if you use the property as your primary residence, you are eligible to take the capital gains deduction. To take the deduction, you must have lived there as your primary residence for at least two of the past five years.
Investment Property Tax Deduction Requirements
Investment property may qualify for certain tax exemptions, but it must follow strict requirements. In general, if you live in a property for two out of the prior five years (the order of when you've lived there is not important), and the property was your primary residence for two years, you are entitled to exclude $250,000 of the gain in the sale of the home from any taxes. Contact a tax account for more information.