All Forum Posts by: Justin Summers

While airbnb's can make money they are a lot of work ..  Unless you are located near the property I would not recommend it. The management company and realtors will inflate the number to expect. The problem with selling in the market is finding anything to buy that makes sense. Sure you existing property has increased in value but so has every other rental property you are trying to buy.  

@Michael Plaks   It's 24 months out of the last 60 months you need to live in it as your primary residence. Right?   I don't follow that I only have 31 months of qualified use..   Don't I only need 24 months?

Okay. I think I have this right but Since I'm dealing with a lot of money Just wanted confirmation. Because it's a lot of money. 

I moved into my house as my primary residence and lived there from June 1st  2015 through June 2018  -  (3 years as Primary)

I moved out and rented out the house from June 2018 through February 2021.   (2 years 8 months as a rental) 

I decided to sell the house in Feb 2021 knowing that I only had 4 more months as a rental before losing my Capital gains exclusion

I put the house on the market for sale and MOVED back into it as my primary Home Feb 1st 2021.  ( 4 months as primary So far in 2021)

The house has not sold yet

But by moving back into it I have basically stopped the ticking clock that was pressuring me to Sell it and claim the Cap gains exclusion, right?   Basically my new Primary residence time in the house for 2021 (Currently 4 months) Gets added to my Prior primary residence time in 2017 and 2018.  

 Meaning as long as I live in the property as my primary until it sells I'm okay with my 2 of the last 5 years rule.. Hope this makes sense. 

Justin

I'm holding a 1st mortgage on a property that I'm selling for just 1 year.. I had a blank "hard Money" mortgage form in my computer from a few years ago that favored the mortgage holder in event of foreclosure but can't seem to find it... I'm just looking for a mortgage template for this loan in Florida. I'm not a lender but just agreed to hold this note for a year. Can anyone help me out? 

Thanks

Thanks Dave-  

"If you buy buy less than you sell then the IRS considers that to be profit first until your entire profit has been taxed"

That does answer my question..  

I have a rental property I've owned for 10 years that my basis is about $150,000.  I sold the property for $600,000 and am holding $150,000 in seller financing for 1 year.    I have a property to purchase for $300,000.    I plan put $150,000 cash with with the QI to cover the $150,000 seller held financing. I know about recaptured Depreciation and other selling costs affecting basis and deductions but I'm just trying to figure out the larger costs/taxes.

My questions. 

1.   If I didn't find another property to purchase other than the $300,000 one.. I would owe normal long term capital gains on roughly how much?   

$600,000-  Basis of $150,000 = $450,000 

So If I only buy the $300,000 would only owe capital gains on $150,000? Even though I only reinvested $300,000 of the $600,000 sales price. 

Or would I owe capital gains on 50% of the gain ($425,000) since I only invest 1/2 of the $600k sales price? 

Thanks

Also if I knew I was only going to buy the $300,000 replacement property how would it affect my Capital Gains taxes if I didn't pay the QI the $150,000 to cover the seller financing?  Would my capital gains be the same? 

following

I own a Real Estate C Corp that Flips properties.   I also own a construction/ design company that gets paid from the C-corp through a 1099 each year when I do construction or design services for the C Corp. 

Averaging about once every 2 years or so I will buy a property to Flip personally in my personal name not in the C-Corp.  Usually this is because I might want to keep it as a rental property or move into it as a primary residence.

I purchased a large home in 2018 that I had planned on Renovating as my primary home..  Well, about 1/2 way through covid hit and renovations stopped for about a year.. 

I then decided to complete the house renovates and just sell the house.. I held the house for just over 2 years. 2018 bought and sold in 2020. 

I also own 4 rental properties that I have held for over 5 years and I'm declaring on my schedule E

My question is would the IRS consider me a Real Estate Dealer?  My primary business through the Corp is "Flipping" properties but any property truly bought to be flipped is bought in the corporate name. Also, any properties I buy to "Flip" are bought under my Corporation and are taxes as  business ordinary income 

Since this home was not purchased with the intent to "Flip" (The reason I purchased it in my personal name and not my Corporation) and since I held the house for over 2 years (past the 1 year long term capital gains rule)  Won't this qualify as long term capital gains 20% as opposed to ordinary income tax rate? Net profit is about $100k so it's not a small difference in Tax rate when you include the higher ordinary income rate and self employement taxes.

Thanks for any insight.

So, my question.

I have a house (Property A) that I lived in for 10 years but moved out of it and into another property 2 years ago.

(Passed The lived in 2 of the past 5 years test)

Property A has 3 bedrooms and a guest house.. I rented out the bedrooms in the house to individual renters and also rented out the guest house to a tenant we will call Jane Doe. She has been living there for 2 years and 3 months. (Also, Passed The lived in 2 of the past 5 years test)

Well, I'm planning on selling the house (about $600k capital gains) and also Jane and I fell in love and are considering getting married.

So, my questions. 

1. Jane and I have both lived in the house for 2 of the past 5 years.  Even though her 2 years were living there as a tenant. 

If we marry do we qualify for the $500k exclusion?

2. Is there a time period before selling that we have to be married? or if we get married a couple of months before selling does that work?

3. Do I need to put Jane on the deed before selling to get the exclusion? I think I read somewhere that it's not required but just want to be sure.

4. Jane is not currently a US citizen and hasn't ever filed taxes here in the US. ( Overstayed her visa from the UK for the last 4 years) Any issue there?

Anything else to worry about that I"m not anticipating? 

Thanks for any help

A few questions. 

I have a property bought in 2017 as a renovate and resell property.. I never rented it or lived in it.. Sold it in 2020.. Owned 1 year 10 months. 

1. would RE property taxes Paid in 2019 be deducted in 2019 tax year? or deducted/added to basis in the year of the sale in 2020? What about HOA payments? I assume they are treated the same as Taxes..

2. I'm assuming this would be taxes at long term capital gains rate as opposed to ordinary income rate?  ( I'm don't do this for a living) only flip 1 property every year or two. 

3. I'm also assuming since this is not a rental property I would not depreciate this property.. Correct? 

Thanks

Justin