My Photo

Skype

Trulia

  • Jeremy Hart, Real Estate Professional in Blacksburg

Meebo

Creative Commons

« Thank You To Steve and Aaron | Main | Here Comes Helmet Hair »

August 12, 2008

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Bill

The gov't has been trying to get at that money for a long time now. They had first talked about changing it when they discussed making major changes to the tax code last year (which never happened), but I guess they figured they could squeeze it into this bill and hopefully not too many people would notice. I think it's a bunch of hooey, but I am never surprised when the gov't tries to get more, more, more.

Jeremy Hart

You know what, Bill? I think you're right. Seems to me I remember something about this as well.

Well, squeeze it in they did - it was on page 690 of 694. I know we've gone to closings with owners who've lived in the home they're selling for a long time, who've still not understood the capital gains exclusion as it used to exist. There are going to be a lot of people now who will be more confused than ever.

stu

Great post Jeremy! I had no idea about this rule and a quick tally it would cost me $4000 to sell my rental property. So what this rule is really doing is penalizing those people who are responsible with their money and do the right thing, and that $4000 goes to bail out those who are not responsible, how is this fair? Yeah, it is not $4 but $4000. Big difference...

Also, how does a 1031 land exchange play into this? Will that rule hold up?

Jeremy Hart

Stu, if you're doing a 1031 exchange on any kind of property, this rule won't apply because the exchange will have to follow different types of rules. For most sellers, a 1031 does NOT work because the property they're selling has been a primary residence, and thus subject to capital gains. For those sellers who are selling investment property, be it land / apartments / commercial etc., if they're not exchanging their property for another and are receiving income, then they'll be taxed at the capital gains rate like everyone else.

Good question though - I should cover 1031 exchanges again on the blog soon.

The comments to this entry are closed.

Mobile Site

Technorati Rank

Enter your email address:

Delivered by FeedBurner

Powered by
FeedBurner

Agent Genius

  • agentgenius.com most sphere'd real estate pros