Avoid Paying Taxes When Selling Your House

Are you thinking about selling your house? Depending on your property, capital gains taxes may become a factor. However, there is a way to defer your taxes! Learn how to avoid paying taxes when selling your house in our latest post!

When you are closing on the sale of your property, you will need to settle your taxes. Capital gain taxes are deduced based on your profit from selling a property. Capital gains tax can affect what you pay for investments, real estate and also assessed on things such as stocks, bonds, cars, and boats.

In order to avoid a big tax bill, it is vital to keep all your receipts of costs incurred before selling the home. You will want to do what they call a “1031 exchange.” To qualify for the exchange, the property must be your primary residence and you must have lived in it for at least 2 of the past 5 years. You won’t be eligible for an exchange if you have claimed it on another property within the past 2 years or you have purchased another property using this exchange a 1031 exchange.

In addition, the property you purchase must be of like kind. You can sell a piece of land and reinvest in a house.

Capital gains tax can affect what you pay for investments, real estate and also assessed on things such as stocks, bonds, cars, and boats.  They are assessed based on the closing price of the property. Capital gain taxes will be considered if you made 250k profit on the sale of a home and you are single, or 500k profit on the home and you are married.

In order to avoid a big tax bill, it is vital to keep all your receipts of costs incurred before selling the home. You will want to do what they call a “1031 exchange.”

What is 1031 exchange?

You might have heard of a 1031 exchange in the past, but do you know how it works?

A 1031 exchange occurs when you reinvest the proceeds from the sale of one property into another property. In doing so, you will be able to defer the amount of capital gains taxes you owe. The process is fairly simple and used by investors all of the time in order to defer property taxes they owe. There are a few qualifications that must be met, but in doing so you will be able to save yourself thousands of dollars.

To Qualify

The property must be your primary residence and you must have lived in it for at least 2 of the past 5 years. You won’t be eligible for an exchange if you have claimed it on another property within the past 2 years or you have purchased another property using this exchange a 1031 exchange. However, the property you purchase with the money must be of the same sort. You can sell a piece of land and reinvest in a house. Vice versa.

At houseo LLC we work with 1031 exchange customers all the time! We are professional investors and property sellers who have a wide array of properties available at any given moment! Our inventory changes daily, with many types of properties to choose from. If you are looking to avoid paying taxes on a piece of property you wish to sell, we are here to help you with a solution! We will walk to through the entire process, saving you thousands of dollars along the way!

Are you ready to sell a house? We can help! Send us a message or give us a call today! 224-306-9359

 

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