Do Closing Costs Reduce Capital Gains?
When it comes to tax implications, closing costs can potentially play a role in reducing capital gains. By including your closing costs into the cost basis of your property when it's sold, you essentially increase the initial investment amount. The effect of this is that it reduces the total profit or 'capital gain' realized from the sale. As a result, the potential capital gains tax that you may owe to the IRS could be lessened. Here’s how it works.
Can Joint Tenants With Right of Survivorship be Contested?
When two or more people own real property together, and they want to ensure a smooth and legally airtight transfer of the property to the surviving owners in the event that one or more owners die, they deed the asset as a joint tenancy.
How Much of a Farm Loss is Tax Deductible?
Farm losses often go hand-in-hand with farm ownership. Figuring out how much of a farm loss is tax deductible can be as difficult as raising corn in Death Valley.
What Are The Advantages and Disadvantages of a 1031 Exchange?
Of all the tools in a real estate investor’s toolbox, none works quite like the 1031 exchange.
Tenants in Common Buyout Agreement: What You Need to Know
There are several different ways to title jointly owned real estate. A Tenancy in Common is a common legal agreement between two or more property owners.
Why Are Rental Losses Disallowed?
Real estate investors know that income-generating investment properties aren’t always in the black. Losses can be common on rental properties, especially in years where you have to fund capital expenditures for major repairs or upgrades to the property, or if you have extended periods where your property sits vacant.
Can You Rent To A Relative In A 1031 Exchange?
Can a property acquired in a 1031 exchange be rented to a family member? The answer, as per the tax court, is yes. However, to ensure that the transaction complies with IRS guidelines, certain key criteria must be met. Primarily, the rent set for the property should align with the fair market value appropriate to its location. Additionally, a formal, written rental agreement is necessary, and the exchanger must diligently enforce its terms, particularly those pertaining to the punctual payment of rent. With these steps, a 1031 exchange involving rental to a family member can be conducted successfully.
How to Get a 1099-DIV Form
If you’ve invested in mutual funds, stocks, or other dividend-paying securities, it’s important to understand how your earnings are reported to the IRS. The 1099-DIV form is a tax document that details the dividends and capital gains you received throughout the year.
Can One Joint Tenant Lease Property?
Joint tenancy is a common way for multiple individuals to own property together. In a joint tenancy arrangement, all co-owners, known as joint tenants, hold an undivided interest in the property. This means that each joint tenant has an equal right to the property, and if one tenant passes away, their share automatically transfers to the surviving joint tenants.
Does a 1031 Exchange Defer Depreciation Recapture?
Depreciation recapture tax is the IRS’ method of recouping depreciation deductions you took while you owned an investment property if the property actually appreciated rather than depreciated while you owned it.
