Sebastian’s Recent Posts

What Assets Do Not Get a Step-Up in Basis?

What Assets Do Not Get a Step-Up in Basis?

Passing assets on to family is a great way to transition wealth. But there are caveats, which mainly include large tax bills. If not done right, beneficiaries can be left with a tax bill they cannot pay. That's why proper estate planning is essential.

Dec 2, 2022

Can You Deduct Realtor Fees From Capital Gains?

Can You Deduct Realtor Fees From Capital Gains?

We’ve written a great deal about the concept of capital gains. We’ve explained what they are, and when they might trigger a taxable event. Though many of Realized’s previous blogs focus on capital gains when selling investment real estate or other capital assets, it’s also possible to generate capital gains from the sale of your primary residence or home. 

Nov 27, 2022

Are Capital Gains Considered Income for Medicare?

Are Capital Gains Considered Income for Medicare?

Congress added Medicare health insurance to Social Security benefits in 1965. The original provisions offered coverage to people aged 65 and older, plus some younger individuals with disabilities. There are currently other eligible groups, which have been added over time.

Nov 19, 2022

What is the 45-Day Deadline for a 1031 Exchange?

What is the 45-Day Deadline for a 1031 Exchange?

When taxpayers execute a 1031 exchange, they must adhere to the rules, including the timing deadlines. In brief, a 1031 exchange allows you to defer payment of capital gains taxes when you sell an investment property if you replace it with a "like-kind" property of the same or greater value. If you think about it, that enables you to leverage your gain to reinvest the entire proceeds from a sale rather than diverting a portion of it to pay taxes. As a result, this tool becomes a valuable part of their investment strategy for many investors.

Nov 14, 2022

Which Investment Type Typically Carries the Least Risk?

Which Investment Type Typically Carries the Least Risk?

The tradeoff between investment risk and reward (or potential return) is one that every investor needs to decide individually. That balance will likely change depending on the investor’s goals, circumstances, and age. But many investors seek a balance between risk and reward by hedging their portfolio allocation according to their risk appetite. For example, the traditional 60/40 portfolio consists of sixty percent equities and forty percent fixed-income instruments, like bonds. The stocks typically offer a more significant opportunity for growth but carry the risk of loss. In contrast, the bonds provide a smaller potential value increase and often less volatility. In theory, the stocks offer growth over the long term, while the fixed income holdings provide a hedge to help manage exposure to periodic value drops.

Nov 10, 2022

What is an Example of a Wash Sale?

What is an Example of a Wash Sale?

Day traders can violate the wash sale rule because of their trading frequency. However, it isn’t only day traders who are susceptible to this tax rule. The worst part is that many people have no idea how it works or that it exists, allowing the rule to creep up on them. The result can be an increased tax bill. We’re going to look at what the wash sale rule is, along with a few examples of how it works.

Nov 5, 2022

What Does Landlord Insurance Cover?

What Does Landlord Insurance Cover?

A landlord can be a small investor renting out one or two single-family homes, a significant investor with multiple commercial properties, or anywhere in between. Where the investor falls along that spectrum will likely influence how much and what kind of landlord insurance they acquire, but every landlord should have some. The Oxford Language dictionary defines insurance as “an…arrangement by which a company…provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.” Basically, the owner (landlord) pays the insurance company in exchange for financial protection against specific losses.

Oct 31, 2022

Who Must File Form 6252?

Who Must File Form 6252?

If you own property and you want to sell, you might be considering strategies to potentially defer capital gains taxes. This is where an installment sale might come in handy. An installment sale allows a buyer to pay for your property over time. This can help defer taxes, as you aren’t receiving a single lump sum. 

Oct 26, 2022

How Long After a Person Passes Away Will a Beneficiary Be Notified?

How Long After a Person Passes Away Will a Beneficiary Be Notified?

When a person dies, any assets they've accrued over the years can be distributed in an orderly manner if a last will and testament was made before the decedent passed away. In the event that a last will and testament wasn't made, the assets could be controlled by the state in which the decedent resided before they are eventually distributed.  

Oct 22, 2022

What is the Difference Between Capital Gains and Dividends?

What is the Difference Between Capital Gains and Dividends?

When working to build your wealth, it’s important to understand the difference between various returns you may receive on your assets. Two of the most common returns are capital gains and dividends. Each income comes from a different source and is taxed differently by the IRS.  

Oct 18, 2022

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