Looking for the best tax tips when selling your property in Norfolk? Look no further. Nobody likes to find out they missed a chance to save potentially thousands of dollars while diversifying your portfolio. If you’re selling your property, it is well worth your while to follow a system to organize your business paperwork. You should always work with a tax professional experienced with investment properties and put in the work required to take advantage of the tax benefits available when you file your return.
To ensure you keep everything you’re entitled to by law, and realize the most in savings on your taxes, take a moment to examine these five tax tips for property sellers in Norfolk.
Tax-Deferred or Tax-Free Investments
Our first tax tip for sellers in Norfolk is special savings accounts for real estate investors. These accounts help you save money when you sell. As a result, you may defer the taxes or have zero tax liability. These individual retirement accounts or IRAs include 1031 exchanges, health savings accounts, Solo 401k, and self-directed IRA accounts. So while there are plenty of rules and regulations, you can grow your real estate investment portfolio while enjoying more of the returns on your investments.
When you sell an investment and make a profit, this is known as capital gains, which brings us to our next tax tip for property sellers in Norfolk. Using the exemption for capital gains, you could pay no gains tax on the sale. The amount of capital gains on the property is dependent on the time you’ve owned the property and your filing status. Current law requires living in the property as the owner two of the last five years and have owned the property 24 months to realize savings in taxes. You can use the exemption once every two years. There are limits on these exemptions. You must stay on top of current laws and work with a professional to avoid errors and realize the best savings.
You can deduct the costs involved in selling your property. Among the allowable expenses for homeowners are deductions for your property taxes and any interest paid on your mortgage debt. Check current tax laws for the current limits on these deductions. Be sure to follow guidelines in determining if your expenditure is for routine maintenance or a repair, while both are deductible. They are treated differently in the tax laws. Improvements required for the sale of the home may be deductible. Watch your timing on this expense. Carefully tracking expenses will help with this tax tip for property sellers in Norfolk, allowable deductions.
Passive Income and Pass-Through Deductions
Our tax tip regarding passive income for property sellers in Norfolk is to take advantage of the passive income deduction; in other words, you don’t physically work to earn this income. In addition, under specific rules, the pass-through deduction allows you to deduct 20 percent of business income.
Property sellers in Norfolk can deduct depreciation, which is the loss of value to the structure over time. So naturally, the IRS has a checklist for this deduction that filers must meet as well.
The experienced professionals at work full time to keep on top of any changes that affect property sellers in Norfolk. In addition, at , let us show you how these tax tips add up to help provide the best income for the properties we manage. And if you’re you looking for an investment property? has a steady inventory available.