“I AM GONNA MAKE A KILLING WHEN I SELL THIS HOUSE!”
“THE TAXES ARE GONNA CRUSH ME!”
The U.S. has had an excellent rate of economic growth over the past decade and real estate has been en fuego in lockstep. A lot of people are finding themselves in the happy conundrum of a pile of profit and the resulting tax concern. DON’T FRET! US Tax code currently allows several great avenues for “DELAY, DEFRAY, DON’T PAY” when it comes to real estate profits. All it takes is a little planning. For most people, profit on their personal home is the most likely concern but the tax code allows for the exemption of a tax liability in the event that a person makes a profit on their home but they must have used it as their primary residence for any two of the past five years and the protection stops at $250K in profit for a single person and $500K in profit for a married couple. For most people, this allows a tax free profit on a primary home and can be a protected cash influx for people looking to down size or “down value”. This is also why many builders and flippers move their personal residence every two years! Tax free cha-CHING!
Additionally there are several avenues for investors to feel like a tax savant including SDIRA, 1031 exchange, and some other advanced mojo. Please call Kent Spehl at (803)397-1001 to discuss your real estate goals! Of course, we’re excellent real estate professionals and we’ve seen quite a few things, but we are not CPA’s – so please get advice before trying any of this stuff on your own!