Selling Investment Property can be Expensive
Careful Planning and Perfect Timing
A tax free exchange is the perfect way to keep money invested in real estate while growing your bank account. You don’t have to pay Uncle Sam when you sell one property to move up in value. An exchange is the best way to keep all of your money invested. Tax free exchanges have very specific time frames that must be adhered to in order not to have to pay the capital gains tax on depreciation and apreciation. There are also specific rules that must be followed for your money to come out of real estate tax free.
Depreciation is required, so is recapture…
Remember not only are you required to claim depreciation on property (not land) that you have, but when you sell you must pay taxes on the recapture. That can be at a tax rate of up to 32%.
Earn $250,000 tax free every two years!
Everyone is entitled to a $250,000 capital gain, tax free every two years on your primary residence. There are also provisions if you sell in less than 2 years. Call before you put your property on the market so the sale can be structures for your financial needs.