How Bidens Capital Gains Proposal May Hit Home Sellers, Investors in RED Hot Market | Barb Schlinker

What are some of the tax issues home sellers must know before putting their Colorado Springs area home up for sale?

  1. In 1998 the law changed that provided for sellers to gain:
    • $250,000 for not married
    • $500,000 for married

Tax-FREE on the Sale of A Home. This Segment is about Taxes when you sell a home and what home sellers should know.

 

I’m Barb Schlinker with Your Home Sold Guaranteed Realty and I have helped thousands of home sellers sell their homes in my career. I attend the closings and I am right there alongside the title closer, going over the closing documents. There is one document they provide that helps title determine whether or not to issue you 1099 on the sale of the home.

Here are the questions that Determine Whether Title will Issue 1099:

  • Have you lived in the home for 2 of the last 5 years?
  • Have you used the home for rental or a business?
  • Have you sold another primary residence in the last 2 years?
  • Are you selling this as a 1031 exchange?

If you answer these questions correctly, there is NO 1099 issued. If you do not, they will issue 1099. But it does NOT mean you have to pay taxes on the Gain.

Investors are Really Getting Squashed by the Biden Administration:

  • 1031 Exchange eliminated for earners over $400K
  • Rent controls to enforce “low income” housing
  • A seemingly never-ending Eviction Moratorium

If you have any questions about this just give us a call at 719 301 9090 or visit BarbHasTheBuyers.com

How can sellers find out more about taxes when they sell?

  • Consult with your tax professional
  • The year after you sell, make sure you hire a tax professional to do your taxes
  • There are a bunch of exceptions to the capital gain laws.
    1. Exceptions to the Capital Gain Laws
      • Military Relocation
      • Job Transfer
    • How to Calculate the Gain:
      • Basic math
        • What You Paid for the Home
        • Plus the Improvements You Put Into the Home
        • Plus your Selling Closing Costs
        • Total that up:  BASIS
        • Take Your Sales Price minus your BASIS = Gain

CAPITAL GAIN EXAMPLE:

Paid: $100,000

Improvements: $20,000

Selling Closing Costs: $32,000

Basis = $152,000

Sales Price – Basis

  • $500,000 – $152,000 = $348,000 (Gain)
  • If Married = No Taxes
  • If Not Married = $250,000 TAX Free
  • $98,000 Capital Gain (maybe)
  • Set aside 20% of the $98,000 for Taxes for next year = $19,600.

 

Don’t Take my Word for It, Call Your Tax Professional. There are so many loop holes, you need to Know for sure with your situation.

#1 Question After Capital Gain is…

  • Do I have to reinvest that money into another home? NO
  • You can do what you want with your gain on the sale

Many have concerns about what this administration may do including eliminating the tax loophole for owners and investors Capital Gains laws.

 

You want an agent who has the knowledge and experience to help you with solutions to your home sale problems: Regardless of your situation or budget Barbs Team can get you ready. Barb and her team have the HELP Program where they can pay for improvements to make reasonable updates that can make the difference between sold for top dollar and NOT sold.  To find out more give her a call at 719 301 9090.

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Barb Schlinker, Listing Agent

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719-301-1802