Taxes are what you pay to the federal, state and local governments where you live. Different types of taxes include income taxes, capital gains tax, sales tax, estate tax and real estate taxes such as property tax. Learn how to bequest property and do transactions in a way that will help you pay less taxes and follow the law.
Organizing Your Personal Finance Life
If you're going to buy a house or refinance your existing loan this year, you should take the time to organize your finances now. Gathering your paperwork together will make it easy to apply for a loan later. Keeping your insurance policies, checking and savings accounts, retirement accounts, investments, tax returns and trust information organized will pay off when you really need the information.
Paying Taxes On Inheritance
When it comes to stocks, inheritance and other assets that have appreciated over time, you inherit these assets at the value they had at the time of inheritance or acquisition. Unless one of these accounts was of a type that had designated you as a beneficiary and are taxable to you directly, you should not have to pay any tax on the amounts you received.
Selling House Two Years After Moving In
The IRS requires that you live in your house as a primary residence for at least 2 of the past five years to keep your profits from the sale tax free. For this home seller, they want to hold off closing until that two-year mark so they can keep their profits and avoid capital gains.
Avoid Foreclosure Through Home Sale
How can you help out a relative who can't make mortgage payments? The relative could quit claim the property to you or sell it to you. Learn what to consider (including taxes) in deciding how to protect the property from foreclosure.
1031 Tax-Free Exchange May Help Delay Capital Gains
When you rent out rooms in your home, you're not only living in your primary residence but you're also conducting business. When you're renting out rooms and later decide to sell what taxes do you have to pay? You may owe taxes on the depreciation you claimed and capital gains tax on the investment portion of the property.
Selling A Long Term Investment Property
What is the tax burden will be when selling an investment property? If you plan to invest in another investment property, you may be able to use a 1031 exchange and defer taxes owed. If the owner has taken depreciation on the investment property, they will need to "recapture" the depreciation.
A Trust Versus Quit Claim Deed
If you wish to leave property to your heirs, a quit claim deed while you're still living isn't the best way to go. Transferring ownership by a quit claim deed can cause a big tax problem and possible gift tax. Putting assets in a trust is a better solution than using a quit claim deed.
Filing Taxes On Your Own
Tax time again! Whether you are using a paid tax preparer or filing solo, you'll need to stay on top of the tax laws. Using software and filing online helps keep track of the myriad of changes to the tax laws each year. If you don't know what deductions you can take, the IRS's website offers hundreds of publications that explain the deductions available for each profession.
Last Minute Tax Tips
Looking for last minute tax tips? For those of you who are still working on filing taxes, here are a few useful tax tips to keep in mind.
Choose Cash Instead Of Real Estate In Contest
When you win a home in a contest you're still responsible for taxes on your winnings including property taxes. When you have a choice between cash and real estate it may be better to choose cash. If you choose the home and keep it then you'll have to pay property taxes and maintain the home. If you choose the home and sell it you'll have to spend money on a real estate commission and other expenses.