Do you have to pay taxes when selling your home? What are the tax implications of selling a primary residence, second home, or investment property? For Episode 26 of the “Jose Luiz Morales Show,” I’m joined by CPA Andrew Kiefer to answer these important questions. This is a topic not many people think about when selling their home. Selling high and buying low is a great strategy in theory, but there are tax payments that need to be factored into it that may impact your real estate goals.

 

Cited below for your convenience are timestamps that will direct you to various points in the video. Feel free to watch it in its entirety or use these timestamps to browse specific points at your leisure: 

 

1:56—Tax laws that apply to the sale of a primary residence

2:50—What is considered a gain?

4:39—Documenting the expenses related to your primary residence 

5:34—Cases when you might be audited

6:29—What happens if you sell a home you haven’t lived in for two of the past five years?

8:15—Defining “prorated” taxes 

9:37—How the capital gains tax changes according to different homeownership timelines  

13:27—Why future sellers must know what the market will do in the next three years

14:56—How investment (rental) properties are taxed 

17:10—Passing an investment property onto your children for them to sell

19:35—Is there a limit to how many properties can have a step-up basis?

20:13—Using 1031 exchanges to nullify the taxes your heirs would have to pay

22:35—Planning for and understanding inheritance taxes 

24:06—Tax strategies to explore 

25:24—The importance of having an estate plan

26:17—Tax laws that apply to secondary homes

28:28—What if you move into a rental property after renting it out for many years?

30:45—Taxable gains are considered capital gains 

32:41—Final thoughts

 

If you have more questions about this topic or would like to get in touch with Andrew, you can email him at akiefer@cbiz.com or call (805) 988-3222. 

 

As always, if you have any other real estate questions for me, don’t hesitate to call or email anytime. I’d love to hear from you.