Gimme Shelter | Real Estate As A Tax Shelter
The Rolling Stones sang about needing shelter, about not getting any satisfaction and lots more emotional, passionate subjects.
But because we list, market, sell real estate listings in Maine, the topic of give me shelter needs plenty of attention. Lots of it under the hot center stage spotlight where we hang out on the Internet, the social media circles.
Because people want to hang on to what they work hard and save up. And part of doing that is knowing, taking all the IRS deductions that are provided for in the current tax codes.
A tax shelter that involves a real estate property listing.
For starters, we are not tax accountants, bean counters nor do we play one on TV or in real life. Have dealt with 1031 exchange or two though.
But there are lots of resources for using real estate as a nifty tax shelter vehicle to steer around paying too much. To save on what you fork over to the IRS around April 15th every year.
And just because we are not CPA’s who we always advise you the faithful reader to consult with for the correct financial planning straight shooting advice.
Does not mean to be scared or skirt around the subject of how to save on your taxes using real estate as one prime way to accomplish that.
The roof over your head, those four walls that contain you is one of the best tax shelters to cut down on what you pay in for taxes.
Your home and it’s standard mortgage deductions, your busiess properties with depreciation all chip in and work together to whittle away at your income tax exposure.To improve your bottom line.
Mortgage expenses, property taxes that can be deducted on your income final tally so you don’t leave so many empty spaces and add to the forms and schedules attached to what you file with the IRS.
It all revolves around real estate and what is deductible for expenses and how you apply those deductions.
When the final number on what you still owe the feds and the state. Or may be lucky enough to trigger a return check in your name delivered to you for over payment and a refund of any size. Money back and not tapped on the shoulder to pay in is always a good feeling when you finalize your income taxes each early spring right?
And what happens when you sell a home, is there a capital gains tax due or how to roll it over or avoid it? Always something to dream about but when you actually are in a situation to sell, there is worry about the damage and tax exposure on a home sale.
Even when it is explained about how all this works at tax time, things get foggy quickly becauser the average bear does not sell a home everyday.
And not every one is in the retirement mode or ready to stop buying and maintaining a residence because moving on over into a elderly rental facility. To get away from the upkeep and to enjoy freedom from all that does come with home or property of any time ownership.
Back back to the profit on your home sale and how the IRS views the situation with today’s tax laws.
There is a real estate primary residence sale exclusion that is pretty important stuff to consider. The tax code provisions spell it out in black and white that up to $250,000 is excluded in a single taxpyer situation, double that to $500,000 if we are talking about a married couple selling their primary residence. One that is your primary home for two of the last five years before you sell it.
What is tax free consideration for a primary residential house sale is thrashed out in fine print on this IRS home sale exclusion rules publication.
In small rural Maine markets, where the sale prices on the house listings are always low hanging, close to the ground, even getting close to the high end numbers is pretty difficult.
Everything is cheaper, divide by three and four or more when comparing the cost of a home in a city and then taking a peek at what the cost is our here in the wide open country spaces.
Life is simpler, less complicated when money is removed and the local population is sparse.
It is worth looking deeper into the dry but powerful regulations to take what you can for partial deductions too provided in the home sale tax exclusion discussion.
The two years as your primary residence in the home sale deduction may consist of 24 full months or 730 days. Short absences, such as for a summer vacation, count as periods of use, but longer breaks, such as a one-year sabbatical, do not. The taxpayer also must not have excluded gain on another home sold during the two years before the current sale.
If you lived less than two years in the residence, other factors kick in to consider that are noteworthy. Like a test, partial credit is better than just right or wrong, you’re in or out that affects your letter grade.
In addition to saving money on income taxes, we help set up owner financed Maine real estate sales. So look mom, no bank. The overhead of the higher interest rates, cost for appraisals, credit check, flood insurance, mortgage insurance and title policy fees all disappear when it is just dealing direct with the seller.
No middle man to add to the expense of time and money.
More on owner financing Maine real estate property listings, how it works.
Like everything in life, rules and regulations apply and you don’t want to trip up and lose any ground on income tax savings you fought hard to gain. Study those home sale exclusion rules and make sure what you read online is up to date and not circling the Internet like defunct space junk doing the same around the planet Earth.
Accurate information is helpful, outdated blurbage that no longer applies is dangerous to the purse or pocket book. Could be one of your life’s most costly mistakes ever made bar none.
Read more about big capital gains mistakes home owners, tax payers make.
And one of the best reasons to buy real estate and use it as a tax shelter is you are no longer throwing money down the drain renting. Climbing out of the rent rut where they is nothing to show but receipts is it’s own reward as your home’s equity increases as the mortgage payment amortization goes the other way.
Heading toward free and clear easy sailing as long as you provide for a portion of your savings to maintain and repair the property called home sweet home.
If you are ready to buy or sell Maine real estate, no matter what type, size, location of property listing, MOOERS REALTY is here to help!
207.532.6573 | [email protected] |
MOOERS REALTY 69 North Street Houlton Maine 04730