Are you thinking about selling your Richardson Tx house? Capital gains taxes can become a factor depending on your property. There is, however, a way to defer your taxes! Learn how to avoid paying taxes in our latest post to sell your Richardson Tx home!
You may be excited to sell your house for a big profit, but Uncle Sam always wants to cut it! Capital gains are assessed on the basis of how much you paid for a property and for what you actually sell it. Capital gains taxes are not only found in property. They are also assessed on things such as stocks, bonds, cars, and boats. In real estate, you can take advantage of many exclusions before you have to pay.
What Is It?
You might have heard of a 1031 exchange in the past, but do you know how it works?
A 1031 Exchange takes place when the proceeds from the sale of one property to another property are reinvested. This means that you can defer the amount of capital gains taxes that you owe. The process is quite simple and is always used by investors to defer property taxes that they owe. There are a few qualifications that must be met, but in doing so you will be able to save yourself thousands of dollars.
The qualifications of a 1031 exchange are pretty standard. You must have lived at least 2 of the last 5 years in the property and it must be your primary residence. You can not use it if you have claimed this exclusion on another property in the last 2 years or if you have purchased another property using an exchange of 1031 in the last 5 years.
The property you buy must be of the same kind. This is a fairly broad term. You can sell and reinvest a piece of land in a house. Or you might want to sell a duplex and buy land to build. Any of these options will fly.
At Top DFW House Buyers we work with 1031 exchange customers all the time! We are professional investors and sellers of properties that have a wide range of properties at all times! Our inventory changes daily with several types of properties If you are looking to avoid paying taxes on a piece of property you wish to sell, we are here to help you with a solution! We will walk to through the entire process, saving you thousands of dollars along the way!