Posted by Esther N. Phahla, CPA, A Professional Corporation

Things To Know About The Real Estate Tax Laws

Things To Know About The Real Estate Tax Laws

Owning a house or a building can bring you a lot of benefits regarding the real estate tax laws. When you live in a house which you own in more than five years then you get exempted to pay the taxes when you want to sell it. When you know about the real estate tax laws, you are able to get huge benefits when it is the time of selling the house or the building. 

Property Sales Rules:

When you are wanting to sell the house then know that you have to live in for consistent three years approximately to avoid the taxes. If your house is worth $300,000 then you might have to pay the taxes up to 50% with the total cost of the house if you are absent for about three years.  The timing means a lot when it comes to sell the property so make sure that you are not absent as living in the house. You have to keep the taxes in consideration while you are about to sell the house which you have to pay to the IRS after selling it. 

Suppose you have to pay about $1.5k to the IRS so you will be left with 50% of the amount which will mean nothing to you because you went into the loss. Knowing the timing of the stay can help you save the entire amount where you do not have to pay any taxes because you are the owner of the house. You cannot even hide the matter of not being in the house because it is not difficult for the IRS department to find out the entire detail of an individuals within seconds. 

Selling Straight: 

When you have the income which is taxable, you are able to avoid paying the taxes according to the updated tax laws in 2017. If you are single parent and have children and lived in the house for about five years then you will not be paying the taxes. If you are gaining profit up to $250,000 or less then you will be exempted from the taxes payment. Whereas, the couples which are married have the same requirement of living in the house for five years but the profit limit is double which makes it $500,000. 

If the profit is above the earnings of you per year then you have to fall into the tax break which is about 20% for the IRS department. There are still some exceptions for the reason why you move out of the house or why you are selling it such as if there is a family illness, no job, no regular income or more. The IRS department checks on the details and provides the exemption for such cases on the reason of selling the estate. 

There are some people who are not able to find people who can pay instantly so if you receive the payments in installments then you are able to get it exempted along with the lower rate of tax if you cross the profit mentioned for the IRS department. Getting the right information regarding the tax laws is necessary because when you file the taxes and you are not aware of the changes then it can disturbing for you when the IRS sends the rejection letter back at your house. You have to be aware of all the changes so that you are able to make the right decisions about the real estate which you have or you would leave for the people behind. 

If you are not sure about the real estate tax laws then it is better to contact the tax preparer who can help you figure out all the matters regarding the estate. Tax prepared are aware of all the knowledge regarding the estates and the things out of which people have to pay the taxes for. They are up to date with information regarding the rules and regulations which help people with dealing through the estate and their matters. As it is not difficult for the IRS department to get all the required information regarding the case they are dealing within few seconds. So, you should get the awareness of real estate tax laws. 

Esther N. Phahla, CPA, A Professional Corporation
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